Dis-Chem buys Medicare Health

Dis-Chem Pharmacies has bought Medicare Health, which operates pharmacies across four provinces where it is underrepresented.

Dis-Chem is buying healthcare and pharmacy group Pure Pharmacy Holdings as it expands its store base into areas where it’s unrepresented. It will pay R282 million for the chain of 50 pharmacies, which trade as Medicare Health.

When it announced its interim results last month, Dis-Chem held back on an interim dividend so it could preserve cash to fund potential acquisitions. These included a community-based pharmacy group that would increase its ability to provide primary healthcare solutions. It said it was also in the advanced stages of concluding the purchase of a strategic interest in a business that specialises in the administration, risk management and delivery of primary healthcare insurance, as well as gap cover and psychological well being.

With many of the stores in the Medicare portfolio located in convenience centres, in geographies where Dis-Chem was currently under-represented, it said the acquisition would give it access to new markets. They also included 43 in-store clinics, expanding its pharmacy clinic network coverage to 411. Integrating Medicare into its own supply chain would result in synergies. It also planned to extend its loyalty and partner offering to Medicare customers to increase shopper frequency and encourage bigger customer baskets.

Dis-Chem recognises that the characteristics of Medicare align with those of Dis-Chem,” the company said. “Both groups are committed to delivering an unrivalled one-stop healthcare experience, with convenience, excellent customer service and value at the core of the brand promise.”
Meanwhile, Dis-Chem said all conditions had been met for its acquisition of Baby City, with the deal becoming effective from 1 January.

The company’s shares fell 4.6% to R19.73 yesterday, outpacing a 2.9% decline in the JSE’s Food & Drug Retailers Index.

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