Buyer found for 7 Lloyds branches in Sainsbury's deal

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The Garden City branch in Oxfordshire is one of the nine acquired by Sutton Chase
The Garden City branch in Oxfordshire is one of the nine acquired by Sutton Chase
Seven of the 14 Lloydspharmacies that Celesio UK is offloading as part of its buyout of Sainsbury's pharmacy business have been acquired by one company, C+D has learned.

The branches (see list below) were bought by Berkshire-based company Sutton Chase Ltd earlier this month, according to documents seen by C+D.

Sutton Chase also purchased two other Lloydspharmacy branches located in Essex, but these are not related to the Sainsbury's deal.

Celesio UK confirmed to C+D last week (March 20) that "completed sales" had occurred for six of the 14 branches, but it did not confirm the name of the purchaser.

Why is Celesio UK selling the pharmacies?

In July 2016, the government's competition regulator gave the go-ahead for Lloydspharmacy's £125 million-acquisition of Sainsbury’s pharmacies – on the condition it sold 12 of its own branches. Celesio UK confirmed the following month that “two other [branches] in specified areas”, had been added to this initial list.

Day Lewis told C+D in December 2015 that the chain was “very, very keen” to purchase the branches. However, the deal never went through, and executive director Jay Patel told C+D last month the purchases had not been “the right time or the right fit”.

Where are the seven Lloydspharmacies located?

  • The Avenue, Leeds, West Yorkshire
  • 248 Lymington Road, Highcliffe, Dorset
  • 344-346 Lymington Road, Highcliffe, Dorset
  • Garden City, Kidlington, Oxfordshire
  • High Street, Theale, Berkshire
  • The Green, Warlingham, Surrey 
  • Birch Hill, Bracknell, Berkshire.
5 Comments
Question: 
Are there any acquisitions happening near you?

Mr Pharmacist!, Pharmaceutical Adviser

We are living in unprecendented times where this is a rush to find yield.  Even if a pharmacy is sold at 10 times its annualised profits, this still returns 10% yield, far better than leaving money in a bank, albeit with a lot more risk.  As for banks they are borrowing at historic lows and re-lending at a margin of 3-4% in a relatively safe sector.  Only when their portfolios experience difficulty will they start reigning in the lending. 

Mr Pharmacist!, Pharmaceutical Adviser

As for you comment about lots of money around, well this is a reflection of excessive equity built up these groups who are now able to flex their muscles.  It is no way a reflection of the "true" market.  Good quality businesses will always be bid for by low geared groups.  However, there is plenty of crap out their that is being bought by first time buyers and fledgling groups.  I suspect the latter group will face hardships in face of the head winds called the funding cuts.  If these businesses fail then it is completely reflective of the nonsense prices these people put into the risk equation without properly considering the impact of the cuts.  I assume Banks are also in the behind the curve in terms of the sector, considering they are still backing purchases at up to 75-80% LTV.  Thats quite frankly incredible.  It is only when the banks evaluate the new risk and reduce LTV's on a transcational basis will Goodwill's drop to realistic historic levels. 

Mr Pharmacist!, Pharmaceutical Adviser

The company is proxy vehicle for Waremoss Group.  Who incidently provide AAH with a lot of business via their Kamsons group in the South East.  Surprise Surprise! The CMA ruling of barriers to acquisition to meet competition was always going to be a whitewash and the fact that the pharmacies ended up with a buyer who has strong links with the AAH supply chain is not surprising at all.
 

ajaz akhtar, Student

You can down click till the cows come home. If it's not viable, why has someone bought 7? Call Christies, sales are booming. 

ajaz akhtar, Student

Proof if there needed any that ppl are still snapping up pharmacies. Still money to be made 

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