£37m MBO as DE Group directors target £196m turnover

One of the UK's biggest pharmaceutical wholesalers is targeting £196m turnover in three years after being bought by two of its directors in one of the biggest deals seen in the North East healthcare sector for several years

Alok Loomba, Christopher Welch, Paul Goodchild, Mark Gulliford, Andy Wilson and Adrian Dye
Alok Loomba, Christopher Welch, Paul Goodchild, Mark Gulliford, Andy Wilson and Adrian Dye

One of the UK’s biggest pharmaceutical wholesalers is targeting £196m turnover in three years after being bought by two of its directors in one of the biggest deals seen in the North East healthcare sector for several years.

DE Group, of Prudhoe, has been acquired by managing director Mark Gulliford and finance director Andy Wilson through a £37m management buy-out (MBO). The new owners are now targeting double-digit growth over each of the next three years to help fuel the fast-growing company’s progress further.

The business is the only short line wholesaler with distribution centres across the UK, and operates from 11 sites throughout the UK and Ireland. In the past few years, it has grown significantly with the acquisition of Doncaster Pharmaceuticals, as well as seeing strong levels of organic growth. Also included in the group are National Generics in the Midlands, Eclipse Generics in Scotland and Crosspharma Pharmaceuticals in Northern Ireland. Gulliford, who has been with DE Group for 22 years, including a previous spell as owner, said the business, which employs 300 people and supplies to more than 4,500 pharmacies, is set for a period of further organic growth to hit its £196m target by 2016.

The transaction was overseen by the specialist pharmacy team at Newcastle law firm Sintons, with funding to support the MBO provided by RBS Invoice Finance, which structured a £37m Asset Based Lending (ABL) package.

Gulliford said: “Both myself and Andy are very much looking forward to taking DE Group to further levels of growth.

“It is a business and a sector we have unrivalled knowledge of, and after a period of acquisition, we are now on track to achieve 10 to 15 per cent growth each year for the next three years in a market where generic medicines account for more than 70% of all prescriptions.

“With strong support from Sintons, RBS and KPMG, the successful completion our MBO will allow us to focus on improving the already high levels of service that our customers rely on.

“As the UK’s largest independent distributor of generic medicines, more than 4,500 pharmacies benefit from our unrivalled buying power and the great deals we offer on a day-to-day basis.”

Christopher Welch, of Sintons, said: “This transaction is one of the most significant deals in the region’s healthcare sector for several years, and allows the management team to further develop the potential of DE Group.”

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