Reinforces strategic commitment to expand corporate chain drug business
TORONTO, Jan. 30, 2012 /CNW/ - Katz Group Canada Inc. announced today
that it has signed a definitive agreement for the sale of its banner
pharmacy business, Drug Trading Company Limited, and its franchise
pharmacy business, Medicine Shoppe Canada Inc., to McKesson Corporation
for a purchase price of approximately $920 million in cash. As part of
the transaction McKesson is also entering into other ancillary
agreements with Katz Group. Both Drug Trading and Medicine Shoppe
Canada offer purchasing, merchandising and other value-added programs
to independent owner-operated pharmacies in Canada.
Under the terms of the agreement McKesson will acquire substantially all
of the assets of Drug Trading, the shares of Medicine Shoppe Canada and
a joint ownership interest in ProPharm's® pharmacy software application. ProPharm® will work with McKesson through a transition period to ensure McKesson
can continue to efficiently support independent banner members and
franchisees when the transaction closes and thereafter.
Daryl Katz, Chairman of Katz Group, said, "This transaction unlocks
significant value through the sale of two outstanding but non-core
assets. We will intensify our focus on our corporately owned Rexall and
Rexall/Pharma Plus store network to accelerate the growth of our Rexall
brand and the value proposition that it represents to our patients and
customers. We will also accelerate the growth of our related real
Contemporaneously, Katz Group announced today that its Rexall division
has acquired Dell Pharmacies, a well regarded 18 store chain operating
in Southern Ontario with approximately $70 million in annual sales.
Dell Pharmacies has a long history of providing trusted pharmacy and
healthcare services in the Golden Horseshoe. This acquisition is
highly complementary to Rexall's existing store base in that market and
dovetails well with the group's corporate store strategy. The Dell
stores will be integrated into the Rexall network.
Since 2004, Katz Group has redesigned and repositioned more than half of
its more than 400 corporate-owned Rexall and Rexall Pharma Plus
pharmacies, while introducing a host of innovative customer and patient
services, including medication compliance and preventative care.
Mr. Katz added, "We have every confidence that Drug Trading's
independent pharmacy members and Medicine Shoppe's franchisees will
enjoy market-leading pharmacy support and will continue to grow and
prosper under McKesson's leadership. Katz Group Canada will also
continue to work closely with McKesson on a number of strategic
initiatives that we believe will create significant long-term value for
Katz Group will continue to supply Drug Trading's Guardian® and I.D.A. TM banners and Medicine Shoppe Canada franchisees with Rexall branded OTC
and health and beauty products. McKesson will continue to serve as the
primary pharmaceutical distributor for Katz Group's corporately owned
stores, Drug Trading and Medicine Shoppe Canada.
The transaction with McKesson is subject to customary closing
conditions, including the receipt of Canadian regulatory clearances and
is expected to close in the first half of calendar year 2012.
About Katz Group Canada Inc.:
Founded by Daryl Katz, Katz Group Canada is a privately held pharmacy
operator and services provider with multiple divisions and subsidiaries
in retail, specialty and employer environments including Rexall, the
company's flagship corporately owned and operated retail chain. Other
pharmacy businesses include Drug Trading Company Limited, Medicine
Shoppe Canada Inc., Rexall Specialty, Rexall Health Services, Rexall
Direct mail order and ProPharm Limited. With some of the most trusted
brands in retail pharmacy, Katz Group is committed to providing
community pharmacy care focused on improving the health of Canadians.
About Drug Trading Company Limited:
Drug Trading Company Limited is the largest integrated pharmacy banner
and services provider in Canada, providing comprehensive retail and
pharmacy programs to more than 850 independent pharmacies from coast to
coast. Established in 1897, the company has developed some of the most
trusted pharmacy banners in Canadian pharmacy in the Guardian and
I.D.A. brands and offers comprehensive independent pharmacy support
services including merchandising, marketing, pharmacy services, banner
programs and store design.
About Medicine Shoppe Canada Inc.:
In Canada since 1991, The Medicine Shoppe franchise network of
owner-operated pharmacies has grown to over 160 stores in nine
provinces across Canada, each meeting the needs of Canadians who desire
hands-on personal services in a friendly, welcoming environment.
Medicine Shoppe Canada Inc. provides license full-service support in
running their franchise business including access to the Medicine
Shoppe's unique pharmacy model and proven operating systems.
Note to Editors: Visit advancingpharmacy.com for more information.
SOURCE Katz Group Canada Ltd.
For further information:
Director, Corporate Relations, Katz Group Canada Ltd.
T: 905-501-7894 M: 647-338-4340