Pharmacy chain BIG Pharmacy Healthcare Sdn Bhd will be buying over its rival chain Caring Pharmacy Group Bhd from 7-Eleven Malaysia Holdings Bhd for RM900 million, an online business news organisation reported.
“7-Eleven has closed a deal for the sale of Caring Pharmacy. An announcement on the transaction is expected to be made as soon as today,” a source was quoted saying by the organisation.
In an announcement posted on Bursa Malaysia, listed firm 7-Eleven Malaysia Holdings Berhad — referred to as SEM on the stock exchange’s website — was announced to have asked for a temporary suspension of trading on its shares.
“Kindly be advised that at the request of SEM, trading in the Company’s securities will be suspended with effect from 2.30pm, Friday, July 21, 2023, pending an announcement,” the brief written announcement today by the company said.
In a subsequent company announcement on Bursa Malaysia, 7-Eleven Malaysia’s board of directors announced that Bursa Malaysia Securities Berhad has approved the company’s application for a suspension of trading of its shares “from 2.30pm to 5pm on July 21, 2023 pending an announcement of a very material transaction”.
Caring’s shares are mainly owned by 7-Eleven at 75 per cent, while Motivasi Optima Sdn Bhd owns the remaining 25 per cent stake. Berjaya Corp Bhd founder Tan Sri Vincent Tan is the largest shareholder of 7-Eleven with control over a 28.34 per cent stake.
Checks revealed 7-Eleven Malaysia Holdings Berhad’s latest quarterly report on Bursa Malaysia said it had two main subsidiaries — namely 7-Eleven Malaysia Sdn Bhd which manages the operations and franchising of the 7-Eleven convenience store chain, and Caring Pharmacy Group Berhad which operates a chain of retail pharmacies under the “Caring”, “Wellings” and “Georgetown” brands.
In the quarterly report for the first quarter this year ending March 31, 2023, 7-Eleven Malaysia Holdings Berhad said it recorded RM976.92 million revenue from January to March 2023, with RM655.852 million contributed by its convenience stores business and with RM320.938 million contributed by its pharmaceutical business.
In terms of core profits for January to March 2023, the convenience stores’ segment recorded a post-tax core profit of RM17 million, while the pharmaceutical segment was at over RM4.55 million, the quarterly report showed.
Citing another source, it was reported that there were three main bidders for Caring Pharmacy, but negotiations with 7-Eleven and two of them — US-based private equity firm Carlyle Group and Luxembourg-based private equity firm CVC Capital Partners — ultimately did not succeed.
BIG Pharmacy — which is itself backed by Kuala Lumpur-based private equity firm Creador — had placed the third highest bid. It had previously reported last October that Carlyle Group was in advanced negotiations with a RM1.3 billion bid to buy Caring Pharmacy, but 7-Eleven had wanted a higher amount of between RM1.5 billion and RM1.8 billion.
Caring Pharmacy’s website states that the company was founded in 1994 by five pharmacists who had studied together at Universiti Sains Malaysia, and was stated to have 134 outlets nationwide at the end of 2019.
According to BIG Pharmacy’s website, it was founded in 2006 by husband-and-wife team Lee Meng Chuan and Lim Sin Yin who are qualified pharmacists, with the group having merged with RedCap Pharmacy in 2018 and My Pharmacy in 2019. BIG Pharmacy now has 282 outlets and is said to be planning for an initial public offering or to be a listed company.
