A merger deal backed by £10m of investment from BGF (Business Growth Fund) today created a clear, digital-only leader in the UK online pharmacy sector.
The merger between leading online pharmacy companies Pharmacy2U and ChemistDirect.co.uk creates a business with a 1.5 million customer base and unrivalled experience in digital pharmacy services.
It follows the opening of Pharmacy2U’s brand new £3.5m dispensing hub in Leeds - the first of its kind in the UK – earlier in 2016. The facility is capable of dispensing one million prescription items a month.
The new business will have a broad consumer offer, including:
- A fully managed online home delivery prescription service for NHS patients, including clinical advice from pharmacists. This is a growing area of opportunity under the England-wide electronic prescription service.
- Online doctor consultation services for a wide range of common conditions in areas including womens’ health and mens’ health, travel health precautions and skin conditions.
- A range of over 6,000 health and wellbeing retail products
BGF has provided a £10m investment to support the merger and the new company’s ambitious long term growth plans. The total value of the deal is in excess of £40m.
The Chief Executive of the new combined business will be ChemistDirect.co.uk Chief Executive Mark Livingstone, who has a strong track record in innovative internet-based businesses including LoveFilm and Graze.com.
Founder and Superintendent Pharmacist of Pharmacy2U Daniel Lee, who pioneered internet pharmacy in 1999, will take the role of Chief Operating Officer.
Mark Livingstone said: “This is a landmark moment for internet pharmacy in the UK. We are creating the leading ‘pure play’ business in the sector - with unrivalled experience, facilities and scale.
“It is the beginning of a new era of convenience and choice for millions more patients, as we open up the full potential of internet pharmacy for the first time.
“BGF has confidence in our plans, and their long-term, minority partner approach was the right fit for the business.”
Daniel Lee added: “Online pharmacy has now come of age, with 80 per cent of GP surgeries now using the NHS Electronic Prescription Service and patients keen to shop online for health and wellbeing products.
“Increasing numbers of patients are also seeking the support of online doctor services. This merger means that we are in an unrivalled position to respond to the growing demand for these innovative services.”
BGF is providing £10m of investment to enable the management team at the new combined business to deliver online pharmacy and GP consultation services to millions more patients.
BGF has up to £2.5bn to invest in small and mid-sized companies across Britain. Since 2011, it has backed more than 125 businesses with over £850m of long-term capital.
Richard Taylor, BGF said: “This is BGF’s second significant investment since the Referendum vote, demonstrating that there are business owners and management teams that are forging ahead with their plans. That is a positive sign.
“No one knows the outcome of the next few weeks, but now is not the time for business to start putting the brakes on. Now is the time to keep investing, keep partnering and keep innovating – and that is something we are wholeheartedly committed to doing.”
The investment was led by BGF’s Richard Taylor, Chris Boyes and Rob Johnson. Richard Taylor will join the board of the combined business.