Private equity groups circle UK pharmacy wholesaler
HIG and Capvest have joined a line of private equity groups looking to buy the largest supplier of goods to British pharmacies, AAH Pharmaceuticals, from German private equity firm Aurelius.
AAH has been put up for sale again only a few years after being bought by Aurelius in 2022, according to the Financial Times.
The pharma giant supplies a network of 14,000 pharmacies across the UK and generates £3bn a year in revenues. Based on competitors in the market, the business could fetch up to 10 times earnings, which were expected to be around £90m this year, the report said.
With a number of private equity firms looking into the company, the first round of indicative bids are expected later this month.
It has drawn interest from buyers because it was likely to be the only full-service pharmacy distributor to come to market in the coming years, the report added.
Aurelius acquired AAH as part of a £477m deal with McKesson in 2022, which saw it buy a number of healthcare businesses including Lloyds Pharmacy, John Bell & Croyden and AAH.
The group then went on a year-long divestment spree, selling individual assets or packages of pharmacies, which resulted in Lloyd Pharmacies’ 1,000-strong portfolio of shops being sold to new owners. The remaining shell company was then put into administration.
It also faced criticism earlier this year after putting The Body Shop into administration only six weeks after buying it for £207m, putting around 2,000 jobs at risk.
AAH delivers over 10 million items per week to more than 14,000 pharmacies and other organisations from nationwide distribution centres, and employs around 3,000 people across the UK. Its active customer accounts have increased by 60 per cent since being bought by Aurelius.
HIG did not respond to a request for comment, while Capvest declined to comment.