County Durham pharmacy firm Norchem has been acquired by a Midlands distributor in a deal which will drive the business forward, its chief executive has declared.
Norchem was established in 1960 to benefit independent pharmacists and has since grown to a group comprising 20 pharmacies, with 245 employees across the region as well as a wholesale operation at its head office in Chilton, County Durham.
Now the business has been purchased by Midlands pharmaceutical distributor Lexon for an undisclosed sum, in a deal overseen by Newcastle’s Square One Law and KPMG.
Drew Murdoch, former chief executive officer of Norchem, said: “I am delighted that Lexon has acquired the business as they have demonstrated their long term commitment, not only to the retail stores, but more importantly to independent pharmacy as this has been the core principle of our business from its beginning.”
Pritesh Sonpal, director of Lexon, said: “This transaction takes us to a total of 46 pharmacies in the group.
“With our existing distribution sites in Redditch and Leeds, this gives us the ability to further improve our service to the 1,400 independent pharmacies we currently distribute to on a daily basis.”
Norchem, which has a turnover of around £25m, has grown considerably over the last 55 years.
The shareholders of Norchem were advised throughout the deal by KPMG and Square One Law.
KPMG’s Mark Booth, head of retail pharmacy, and Michael Downes, associate director, led the corporate finance advice.
Mr Booth said: “This sale is a great result for Norchem’s shareholders and employees and represents a valuable investment in growth for Lexon.
“Against a backdrop of regulatory change we are seeing a resurgence of M&A activity in retail pharmacy which is set to continue during 2015.”
The Square One Law advisory team included senior partner Ian Gilthorpe, partner James Bryce and associate Ashraf Ali.
Mr Gilthorpe said: “This was an interesting project for Square One Law, supporting a diverse shareholder base in delivering a good outcome for all parties and providing a good platform for the future growth of the business.”
Alison Herdman, chair of Norchem Group said: “We were really pleased with the service delivery from our North East based advisers and in particular the way they worked together to achieve the best outcome.”
Lexon was advised by Irwin Mitchell with funding providing by RBS.
Nick Dawson, corporate partner at Irwin Mitchell added: “Lexon is a great example of a successful family run business which has a clear vision and is determined to grow and build market share.
“It is already one of the leading pharmaceutical distributors in the UK and this deal will significantly boost its position.”