The Pharmaceutical Journal
Vol 268 No 7198 p673-678
18 May 2002

This article
Reprint
Photocopy

News summary

Related websites
Numark (more)

Numark seeks conversion and starts talks on a possible merger with Nucare

NUMARK Ltd is planning to convert from being a mutually-owned industrial and provident society to being an unlisted public limited company that would, initially, be wholly owned by independent community pharmacists. Numark has also started preliminary talks on a merger with Nucare Plc.

Speaking at a press conference this week, Numark chairman Lord Fowler said that converting to a plc would give Numark the financial strength to compete with national multiple chains in purchasing pharmacies. It would also allow the shareholders to see the value of the Numark brand realised in the price of the shares they owned. Numark currently has around 860 shareholders who between them control 1,520 pharmacies. If the conversion is successful, Numark may seek a London stock market listing in two or three years' time.

Numark is hoping that the conversion process, and a subsequent investment of funds from shareholders, will allow it to raise between £3m and £5m. This money would be used to purchase pharmacies, either on the open market or from shareholders seeking to retire, and to develop Numark's marketing and promotional services for independent pharmacies.

Pharmacists seeking to purchase their own pharmacies could have the opportunity to join the Numark chain through a joint ownership venture. Initially, Numark and the pharmacist would each own 50 per cent of the business. The pharmacist would have the opportunity, over a five-year period, to become the sole owner of the business, which would then join the Numark chain as a full member under a three- to five-year trading agreement.

David Wood, Numark's managing director, said that the scheme would be aimed at pharmacists working as managers who might feel that they were either stifled by a lack of career development or frustrated by the constraints of multiple retailing.

"Our focus will be on small- to medium-sized pharmacies (with turnovers below £650,000 a year) with underdeveloped potential. These are typically below the interest of the pan-European multiples. We would provide pharmacists with an ownership structure that not only delivers lower capital start up costs but includes a full trading concept refit," he said.

Speaking about the possible merger with Nucare, Mr Wood said that talks were still at a preliminary stage. No merger would take place until Numark's proposed conversion was completed. The two events were not linked.

Nucare is an unlisted plc. Its shareholders own around 1,200 pharmacies. Veni Harania, chairman of Nucare, said: "While it is easy to see the benefits a merger may achieve, it is business as usual at Nucare. The merger process could take up to six months to complete and it all depends on the conversion of Numark to a plc in the first place. Meantime, we are concentrating on our current development programmes."

Nucare has its own generic and parallel import pharmaceuticals business based at Stanmore, north London. It has recently started a retail branding scheme for its members. Numark has offices and a depot at Tamworth in the West Midlands. It recently formed Numark Trading Ltd, a joint venture with Phoenix Medical Supplies.

Both groups believe that there is not a large geographical overlap between the two chains, with Nucare strongest in the South East and Numark stronger in the Midlands, north and south west England, Scotland and Northern Ireland. Together they would form a virtual pharmacy chain of 2,700 pharmacies, almost twice the size of any of the national multiples.

Numark shareholders are to be sent a prospectus giving details of the proposed conversion plans. A series of meetings will be held during June and an extraordinary general meeting to approve the change is planned for July.

Comment, p672