LloydsPharmacy agrees to buy rival McCabes

The combined group will trade under the McCabes brand and be led by McCabes’ chief executive Sharon McCabe.

The financial terms of the proposed acquisition have not been disclosed.

It’s the latest large deal in the Irish pharmacy sector, where consolidation has been increasing.

LloydsPharmacy, whose immediate parent is PHX Ireland, currently has 82 stores across the country, while McCabes has 32 across the greater Dublin area.

The deal will need clearance from the competition watchdog.

The latest set of publicly-available accounts for LloydsPharmacy show that it generated sales of €144.6m in the 12 months to the end of March 2022, compared to €135m the year before. Like-for-like sales were 7pc higher.

In the 2022 financial year, it posted an operating profit of €3.1m compared to a €345,000 loss the previous year. It noted that there was a significant spike in locum costs due to lack of community pharmacists in the sector.

Accounts for a holding company behind McCabes, called Kalamunda, show that the group’s sales rose to €64.1m last year from €58m in 2021. It made a €1.5m operating profit in 2022 compared to a €1.2m profit the year before. Those accounts represented activity of 26 retail pharmacies and a website.

The accounts noted that demand for prescription medication, healthcare products, services and advice remained strong. However, the directors added that wages, salaries and other overheads – particularly insurance – have risen.

In June this year, McCabes – which was established more than 40 years ago - acquired three pharmacies in Dublin, bringing its tally to 32.

The LloydsPharmacy chain was sold last year by McKesson Europe to Phoenix as part of a wider sale of assets across Europe. The Irish assets acquired by Phoenix included the pharmacy business as well as pharmaceutical wholesaler and distributor United Drug, and TCP Homecare.

Paul Reilly, the chief executive of PHX Ireland, welcomed the proposed deal with McCabes.

“Sharon will lead the combined community pharmacies with a patient and colleague-centric approach, while continuing to provide the high standards of services both groups have been providing for many years,” he said.

Sharon McCabe said that the two groups have “shared ambition, values and a vision for primary care in Ireland”.