EBOS Chief Wants to Rev Up Acquisitions in Pharmacy
The incoming chief executive of $2.5 billion pharmacy and animal healthcare company EBOS says the group is “actively looking” for more acquisitions in both of its main divisions and predicts further consolidation in the pharmacy sector as size becomes more important.
EBOS has a 50.1 per cent stake in the Terry White Chemmart Group that operates 500 retail pharmacies in Australia and is also the largest pharmaceutical wholesaler and distributor to pharmacies and hospitals after acquiring the Symbion business in mid-2013 for $NZ1.1 billion.
John Cullity, who has been the chief financial officer of EBOS since mid-2014, will take over the top job from Patrick Davies in March and said the company wouldn’t divert from its strategy of pursuing growth by acquisition.
While the company was also driving organic growth, it was eyeing acquisitions large and small that could be bolted on to the pharmacy and animal healthcare divisions. Pharmacy represents about 80 per cent of the EBOS business.
Actively Hunting Acquisitions
“We’ve been very consistent about that. We are actively looking for other opportunities,” he told The Australian Financial Review on Wednesday.
EBOS acquired on-site hospital pharmacy company HPS for $154 million in May and in October bought a 14 per cent stake in ASX-listed MedAdvisor, a digital medication management company.
He expects more mergers and acquisitions in the pharmacy sector and wants EBOS to be a player in it.
“I think there is more of a consumer trend toward the bigger brands,” he said.
“That seems to be a trend that is gathering pace.”
Mr Cullity declined to go into specifics about the prospects of securing a wholesale supply contract put out to tender by industry giant Chemist Warehouse, which was first revealed by the Financial Review‘s Street Talk column on November 20.
“We’re certainly looking for growth in our wholesaling business,” he said. “We’d have a close look at it.”
The Chemist Warehouse contract is now held by Sigma Healthcare.
EBOS has a dual listing on the ASX and the New Zealand Stock Exchange. Mr Cullity has two decades of experience in finance roles including at Sigma Pharmaceuticals and Coca Cola Company in the US.
He had been the chief financial officer of Symbion when it was acquired and in the past few years has worked closely with Mr Davies, who also arrived at EBOS via Symbion, where he was chief executive for eight years.
Mr Cullity, who grew up in the Melbourne suburb of Glen Iris and is a keen Collingwood supporter in the Australian Football League, studied economics at Monash University. He will be based in Melbourne and said there would be no let-up in the expansion strategy.
“We’re going to continue to build out both of the businesses,” he said. “We’re think we can get good returns out of both.”
The animal healthcare business includes the Black Hawk premium pet food brand and Mr Cullity said that division provided solid diversification against any future regulatory changes by authorities in the pharmacy market.