Pharmacy M&A deals jump 26% - as sector thrives during pandemic

Sales of PPE, along with Covid testing has opened up a whole new business lines for pharmacies. This has not only increased their appetite amongst pharmacies to acquire smaller operators  but also made pharmacies a more attractive target for buyers from outside of the sector.

Both regional and national pharmacy groups are making acquisitions, including first time buyers that have not previously made acquisitions.

John Ierston, Partner in our Chester office says unlike much of the retail sector, the majority of pharmacies are still focusing expansion on buying additional sites, rather than investing in ecommerce.

There are many benefits associated with merging, for example pharmacies can deliver economies of scale, particularly in back office functions. It also allows them to take on greater expertise, expand their workforce and increase their services provision, allowing them to serve a wider customer base.

John Ierston says: “Pharmacies are one of the few industries to have benefited from the pandemic – this has been reflected in the sector's healthy M&A activity.”

“Mergers and acquisitions remain the quickest way for pharmacies to expand their portfolio of both high street and health-centre locations.”

It is important to realise ahead of any future sale that the structure of a pharmacy business is vitally important. Many owners enter a sale not realising they can usually sell a pharmacy without having any immediate tax liability.

Advance planning will also be key to make use of available tax reliefs to avoid overpaying. An example is Entrepreneurs' Relief which reduces the amount of Capital Gains Tax payable from 20% to 10% when selling a business.

UHY Hacker Young in Chester are specialist Pharmacy accountants. We have developed a deep knowledge of the needs of retail pharmacists, over a number of years, together with an understanding of the business environment in which you operate.

Our clients are based across the UK, from sole practitioners with a single outlet, through to regional multiples. We work with a number of growing and acquisitive pharmacy businesses who we have supported through their development. We have helped many of these to grow through acquisitions introduced through our associated company specialising in finding high quality pharmacies for sale.

With Mergers and Acquisitions up at the moment, UHY are highly qualified to provide advice and guidance during the process. We can set up the appropriate corporate structure to facilitate a deal, negotiate suitable terms to provide our clients with the best outcome and also identify the best possible tax advantages of any deal so that you don't have to.

We fully support clients throughout, to ensure they understand the process.  We liaise regularly with their solicitors so we are able to react quickly should any issues develop. We work with many of the specialist Pharmacy solicitors in the UK and try to ensure the deal crosses the line as efficiently as possible. It is this comprehensive support that means clients return to us for their next transaction.

UHY Hacker Young is a UK Top 20 firm and is a sector specialist in Pharmacy Accounting. Working with UHY will provide you with direct access to highly qualified and experienced experts who are dedicated to seeing that your company thrives.

Having a specialist accountant that understands your needs, is essential. We build strong and lasting relationships with our clients and tailor our services to their specific needs. We would welcome the opportunity to speak with you about what accounting with UHY Hacker Young would look like for you.