PETALING JAYA: Caring Pharmacy Group Bhd, the local pharmaceutical retail chain with 110 outlets in the country, is said to have attracted the interest of a South Korean foreign equity firm.
Sources said the private equity firm that has interest primarily in companies with a specialised retail chain was keen on taking up a substantial block of shares in Caring Phamarcy.
“What Caring Pharmacy offers is its 110 outlets, growing presence in the most populated areas in Peninsular Malaysia and principal rights to distribute some pharmaceutical and personalised healthcare products,” said a source.
Caring Pharmacy recorded a profit after tax of RM17.79mil on the back of turnover of RM460mil for the financial year ended May 31, 2017. The profit was an improvement of 50% compared to the RM8.55mil recorded in the corresponding period last year.
In the first quarter this year, Caring Pharmacy recorded a profit after tax of RM4.33 mil, which is a vast improvement compared to the RM1.1 mil recorded last year.
The company attributed the growth in its bottom line to the increase in same-store sales from its existing chain of outlets.
Caring Pharmacy is a retail chain established in 1994 by five pharmacists from Universiti Sains Malaysia. It is the fastest-growing pharmaceutical retail chain and expected to open between 10 and 12 stores in 2018.
It is not known if the South Korean private equity arm is looking at buying new equity or taking up some existing shares.
The entry of a private equity fund into Caring Pharmacy should strengthen its existing portfolio of shareholders.
The major shareholder of Caring Pharmacy is Motivasi Optima Sdn Bhd that owns 50.35% equity interest in the pharmacy chain. The shareholders of Motivasi Optima are Chan Yew Siang, Soo Chan Chiew, Tan Lee Boon and Ang Khoon Lim.
The second largest shareholder is Permodalan Nasional Bhd with 12.76% stake.
Berjaya Group’s Tan Sri Vincent Tan used to be a substantial shareholder through Jitumaju Sdn Bhd. However, Jitumaju ceased to be a substantial shareholder in February this year.
“If the South Korean firm takes up a substantial stake in Caring Pharmarcy, it will lend credence to its ability to attract shareholders with a medium to long-term approach to the company,” said an industry source.
On the local scene, Caring Pharmacy is fast catching up to its peers by adopting an active approach in maximising the locations of its stores compared to its competitors that have a larger chain of stores.
For instance, in the financial year ended May 2017, it closed eight underperforming outlets and opened a similar number in other locations. It also relocated one of its stores.
This story first appeared in StarBiz Premium