Leeds’ Pharmacy2U completes £40m merger with Chemist Direct to create industry giant
Pharmacy2U, the Leeds-based online pharmacy company, has merged with Chemist Direct in a deal backed by £10m of investment from Business Growth Fund.
The merger creates a digital-only giant in the UK online pharmacy sector with a 1.5 million customer base.
The deal follows theopening of Pharmacy2U’s new £3.5m dispensing hub in Leeds earlier in the year. The facility is capable of dispensing one million prescription items a month.
BGF has provided a £10m investment to support the merger and the new company’s long term growth plans. The total value of the deal is in excess of £40m.
The chief executive of the new combined business will be Chemist Direct chief executive Mark Livingstone, who has a previously worked for several internet-based businesses including LoveFilm and Graze.com.
Daniel Lee, founder and superintendent pharmacist of Pharmacy2U, will take the role of chief operating officer.
Mark Livingstone said: “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.”
Daniel Lee added: “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 £10m of investment to enable the management team at the new combined business to deliver online pharmacy and GP consultation services to millions more patients.
Richard Taylor, BGF said: “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.”
The investment was led by BGF’s Richard Taylor, Chris Boyes and Rob Johnson. Richard Taylor will join the board of the combined business.