Private Equity Asset Management

Case Studies

Planet Pharmacies LLC

Snapshot: 

 

Country

UAE

Industry

Retail Pharmacies

Year Established

2007

Investment Date

2007

Commitment

USD74.9mn

Ownership Structure: 

The Company

  • Planet Pharmacies (“Planet”) is a UAE based company focused on the acquisition, operation and management of retail pharmacies in the MENA region and is one of the leading healthcare products retailers & distributors in this domain.

  • The Company acquired the pharmacy and distribution business of Julphar. Post-acquisition, the Company had sold off and closed some non-performing branches and initiated an acquisitive growth plan.

  • Planet acquired a large retail pharmacies’ chain in KSA with 51 pharmacies in addition to other pharmacies in Oman.

  • After optimization of the store portfolio and ongoing expansion, the Company currently has 162 retail pharmacies, spread across UAE, Oman & KSA.

 

The Challenges

  • Consolidating the business was one of the key challenges across the various pharmacies in different countries.

  • Optimal utilization of excess cash.

  • Expansion by acquisition and the introduction of new investment opportunities.

 

Our Approach to Add Value

  • Helped in finalizing the acquisitions made which lead to the enhancement of value proposition from new manufacturing initiatives.

  • Internal audit reviews and improvement in internal controls.

  • Improvement in reporting and financial performance dashboards.

  • New acquisitions initiatives/targets in UAE and KSA.

  • Optimizing the company’s capital structure to maximize shareholders value.

  • Additions to the management team and hiring and induction of the Group GM.

  • Overseeing the growth in new agencies business and development of the warehouses in UAE, KSA & Oman.

  • Promoting management by objectives and long-term incentive scheme for alignment of interests.

 

The Result

  • Planet has effectively consolidated its business operations and has now a sustainable revenue stream.

  • Planet has grown its retail pharmacies network across three countries, closing non-performing ones and optimizing the number of operating pharmacies.

  • Steady growth in revenues with improving net income after the reorganization of the Company. In 3 years only (from 2011 till 2014):

Revenues grew by 1.6x

From a negative EBITDA of USD5.8mn to a positive EBITDA of USD13.3mn

From a Net Loss of USD6.0mn to a Net Profit of USD11.1mn