Connection Capital clients invest £8m to support MBO and buy-and-build strategy of fast-growing community pharmacy group

News: Investment News | 30 June 2021

Our newsletter

Clients of Connection Capital, the specialist private client investment business, have invested £8m, as part of a £14.2m transaction, to support the MBO and buy-and-build strategy of fast-growing UK community pharmacy operator, Mr Pickford’s Pharmacies.

  • Significant scope for consolidation of fragmented sector and business transformation through innovation

The deal will see the team behind Mr Pickford’s Pharmacies, which has seven sites in the Leicester area, acquire two other successful pharmacy businesses with 14 sites in South Yorkshire (JM McGill Pharmacies and D&R Sharp Pharmacies). This will create one of the 30 largest independent community pharmacy groups in the UK by number of sites.

Mr Pickford’s Pharmacies is led by a highly experienced CEO and COO in Mark Stephenson and Mimi Lau, who joined the business in 2019. Through their efforts, the business’ performance has been transformed through buying efficiencies, smarter use of technology, and winning NHS contracts for value-adding services such as vaccinations.

For example, Mr Pickford’s now has the second highest rate of flu vaccinations per site of any pharmacy group in the UK. It has also run three of the first pharmacy led Covid-19 vaccination sites to be approved nationwide.

The plan is to replicate these operational efficiencies and innovations across the whole of the new group, creating synergies and unlocking embedded organic growth potential from day one, as well as to grow further via acquisition. The community pharmacy sector is highly fragmented, with more than 3,300 independent groups across the UK, most of which are relatively small, providing an opportunity for efficient operators to drive consolidation.

Connection Capital has partnered with DunPort Capital, which will provide senior debt funding to support the transaction and further undrawn facilities to support future acquisitions as part of a buy and build strategy.

Connection Capital provides far more than purely financial support. It has been working closely with the Mr Pickford’s team pre-completion to introduce an experienced Chairman and an interim CFO who have been involved in developing the plan, and it will continue to be active in supporting strategy implementation, post-deal. Former Global CIO of Walgreens Boots Alliance, Anthony Roberts, will also join the board as a non-executive director focused on the implementation of market leading technology within the group.

Miles Otway, Partner at Connection Capital, comments, “Community pharmacies are an increasingly important part of primary care, delivering services for the NHS cost-effectively, as evidenced throughout the Covid-19 pandemic and the flu vaccine programme.”

“The management team within Mr Pickford’s Pharmacies has established an innovative methodology for delivering organic growth and enhancing profitability – one which is directly applicable to the newly acquired sites and should deliver swift uplifts in performance.”

“This is also a sector with significant scope for consolidation. The investment strategy seeks to replicate the success achieved by operators in other fragmented markets like dentistry, to create a challenger group of meaningful scale. It’s an exciting investment opportunity for our clients.”

Mark Stephenson, CEO of Mr Pickford’s Pharmacies says, “Mr Pickford’s Pharmacies are delighted to have acquired an additional 14 pharmacies to add to our existing seven pharmacies. Our intention is to continue to grow both organically and through a series of clustered targeted acquisitions. We believe our proposition of employing the best people in pharmacy, mixed with market leading technology and clinical excellence, results in a brilliant proposition for our patients, staff and stakeholders.”

About Connection Capital
Connection Capital LLP is a Financial Conduct Authority authorised and regulated, specialist syndicator of investment funds from private professional investors into direct private equity, private debt and commercial property deals, as well as alternative asset funds. It currently has some £320 million of funds under management across a diverse portfolio.

Connection Capital provides a specialist managed service to help professional clients build up their own alternative asset portfolios. Private investors self-select which opportunities they want to take a stake in. Opportunities are identified and negotiated by Connection Capital, which also carries out all due diligence and manages the investment from completion through to exit, on its clients’ behalf.

Press enquiries:
Claire Madden
Managing Partner
Connection Capital
020 3696 4010 or 07764 241476

Russell O’Connor
Headlines for Business
07760 282586