UK online pharmacy companies Pharmacy2U and ChemistDirect.co.uk have merged in a GBP40 million deal backed by GBP10 million of investment from Business Growth Fund (BGF), creating a business with a 1.5 million customer base.
The merger follows the opening of Pharmacy2U’s brand new GBP3.5 million dispensing hub in Leeds – the first of its kind in the UK – earlier in 2016. The facility is capable of dispensing one million prescription items a month.
BGF has provided a GBP10 million investment to support the merger and the new company’s ambitious long term growth plans. The total value of the deal is in excess of GBP40 million.
The chief executive of the new combined business will be ChemistDirect.co.uk chief executive Mark Livingstone, who has a strong track record in innovative internet-based businesses including LoveFilm and Graze.com.
Founder and superintendent pharmacist of Pharmacy2U Daniel Lee, who pioneered internet pharmacy in 1999, will take the role of chief operating officer.
Livingstone says: “This is a landmark moment for internet pharmacy in the UK. We are creating the leading ‘pure play’ business in the sector – with unrivalled experience, facilities and scale.
“It is the beginning of a new era of convenience and choice for millions more patients, as we open up the full potential of internet pharmacy for the first time.
“BGF has confidence in our plans, and their long-term, minority partner approach was the right fit for the business.”
Lee adds: “Online pharmacy has now come of age, with 80 per cent of GP surgeries now using the NHS Electronic Prescription Service and patients keen to shop online for health and wellbeing products.
“Increasing numbers of patients are also seeking the support of online doctor services. This merger means that we are in an unrivalled position to respond to the growing demand for these innovative services.”
BGF is providing GBP10 million of investment to enable the management team at the new combined business to deliver online pharmacy and GP consultation services to millions more patients.
BGF has up to GBP2.5 billion to invest in small and mid-sized companies across Britain. Since 2011, it has backed more than 125 businesses with over GBP850 million of long-term capital.
Richard Taylor of BGF says: “This is BGF’s second significant investment since the Referendum vote, demonstrating that there are business owners and management teams that are forging ahead with their plans. That is a positive sign.
“No one knows the outcome of the next few weeks, but now is not the time for business to start putting the brakes on. Now is the time to keep investing, keep partnering and keep innovating – and that is something we are wholeheartedly committed to doing.”
Taylor will join the board of the combined business.
