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John Hinks – Droitwich Pharmacy

John Hinks had been running Droitwich Pharmacy for 35 years when he came to BCMS with the decision to sell. “It was time for a change, and I was getting fed up. I wanted to be free of the responsibilities of running the company. So, I decided to sell the business and retire. I had in fact been thinking about selling for a very long time. In addition to this, my wife had also been asking me for years to sell the business!”

Droitwich Pharmacy is an independent dispensing pharmacy, which supplies in excess of 20,000 scripts per month. First established in 1978, the business has been operating as a registered pharmacy in Droitwich Spa, Worcestershire. In addition to dispensing medicines under contract with the NHS, Droitwich Pharmacy Limited offers a range of services and healthcare products for retail sale. It is placed in the top 100 pharmacies in the UK.

“I had regularly received letters from BCMS over the years, and eventually I chose to attend one of your events.”

Didn’t want to go down the traditional route

John explains that tere are traditionally three or four agents in pharmacy that manage company sales: “I wasn’t confident that they would do a good enough job for us. In my opinion they typically sell businesses to the same small pool of potential candidates.”

Even though BCMS had not sold many pharmacies they had sold pharmaceutical companies. “I had regularly received letters from BCMS over the years and eventually I chose to attend one of your events. We listened to what Dave Rebbettes had to say and it sounded sensible. We went home, talked it through and thought about what we had heard for some time. Weeks later we decided to get in touch with BCMS and arranged a meeting. We chose you because you were non-traditional and unknown in the industry.”

“When we met with potential purchasers, our deal leader James Pugh was surprised at how many of the acquirers I already knew on first-name terms - simply because the industry is so incestuous.

I play golf quite often as a member of the Pharmaceutical Golf Society, and I took part in events sponsored by broker firms who manage pharmaceutical business sales. But I was wary of these firms as I didn’t want to go down that traditional route.”

“The sale process was managed very well, and every stage progressed as first outlined.”

The sales process management

From the outset, BCMS provided a list of potential buyers for John: “The sale process was managed very well, and every stage progressed as first outlined.”

However, as many sellers know, the due diligence process can be the hardest: “The due diligence process felt quite wearing as the level of questioning was quite intense. The acquirer’s lawyers began asking for infinitesimal detail.  In the grand scheme of things, I felt some of the questions were nit-picking and at times it felt like we were chasing our tail.”

“The impact on us running the business was almost nil. We separated the two tasks quite easily. I was also reliant on my manager, who managed all the day-to-day operations of the business.”

John went in to selling with a sale price and terms in mind: “The value certainly met and exceeded my expectations. BCMS and the solicitors worked very hard to achieve what I wanted.

“The market is complicated for pharmacies, particularly as the government introduced the 100 hours legislation, where anyone could open a pharmacy without much scrutiny. This impacted deal values tremendously, which is why I waited till this policy lapsed before choosing to market the business.”

The importance of confidentiality

“Confidentiality was hugely important to me. I play golf often with people that could have bought the business and so I knew a number of the people that came forward expressing an interest. We did have an instance where one potential purchaser did let slip that they were looking at acquiring the business while attending an industry function. This did get back to an acquaintance of mine, but ultimately it did not affect the sale.”

The staff

“All staff are staying with the business and that was very important to me. I’ve been in the business for 35 years and built up a tremendous amount of trust with staff over that time. The new owners took on the staff and they have respected these relationships. They kept our manager in place, which I’m also happy about.”

Life after sale

John didn’t want to be involved with the business post-sale: “We’ve bought a little cottage in Cornwall which we visit fairly regularly now. I have very little involvement with the business now and moving forward will be free of it completely. There are premises that I have across the road and I’m letting my tenants carry on there for a time.

I’m wanting to take time out to re-evaluate our lives. This is a very different situation. I’m thinking about putting the sale proceeds to work so I can generate additional income in the future.”

 

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Company name
Droitwich Pharmacy
Location
Worcestershire
Business activity
Pharmacy
Reason for sale
Retirement
Sold
2014
Acquirer
MSA Global Holdings
Droitwich Pharmacy acquired by MSA Holdings