Dublin-listed healthcare services group Uniphar has said that its proposed multimillion-euro purchase of pharmacy solutions business NaviCorp “will no longer proceed to completion” after being blocked by the Competition and Consumer Protection Commission (CCPC) on competition concerns.
It is the first deal that Irish competition authorities have decided to prohibit since 2012.
The CCPC said in a statement on Thursday evening that planned Uniphar acquisition “may not be put into effect on the grounds that the result of the proposed acquisition will be to substantially lessen competition in markets for services in the State”. The Irish Times had reported earlier on Thursday that the deal was about to be blocked.
On Friday morning, Uniphar acknowledged the CCPC’s decision. “Following the proposal to acquire Navi, which was announced on 23rd December 2021, both Uniphar and Navi have engaged extensively with the CCPC and supported them in their review of the proposed transaction,” it said. “However, the transaction will now no longer proceed to completion. Navi has been a longstanding partner of Uniphar and both parties will continue to work closely together to support our shared customer base of independent community pharmacies.”
NaviCorp, a pharmacy solutions business which specialises in product buying and trading and the provision of IT and retail franchise services to pharmacies, posted operating profits of €6.26 million on €33.4 million of turnover last year, according to its most recent set of accounts, filed with the Companies Registration Office. The company is owned by chief executive John Carroll and executive chairman Simon Healy.
The CCPC said it would publish its full determination within 60 working days. A spokesman for NaviCorp was not in a position to comment when contacted by The Irish Times.
Uniphar, where chief executive Ger Rabbette has led an acquisitions spree since the company floated in Dublin in 2019, announced the plan to buy NaviCorp last December for an undisclosed sum. It notified the planned transaction to the CCPC on Christmas Eve. The authority said in April that it was carrying out an in-depth look at the deal, before raising concerns in an assessment issued to both sides in September.
Uniphar, formed in 1994 through the merger of United Pharmacists Co-op and Allied Pharmaceutical Distributors, has committed in excess of €380 million on deals since its initial public offering (IPO), according to disclosures in annual reports and analysts estimates of the values of more recent deals. That excludes the NaviCorp deal.
This is the first time the CCPC has prohibited a merger taking place since it was established in 2014 to take over roles previously held by the Competition Authority and the National Consumer Agency.
The Competition Authority had moved to block less than a handful of deals during its 12 years in operation. The most recent was its decision in 2012 to stop a plan by Eason’s to buy Argosy Libraries.
A number of merger plans have been withdrawn over the years when it became apparent that they would struggle to secure competition approval. This week saw East Cork Oil, one of the largest oil distributors in the State, abandon a plan to acquire a Kerry-based rival following scrutiny by CCPC.
Major purchases carried out by Uniphar since its flotation include Durbin, a specialist supplier of pharmaceuticals with offices in Britain and the United States, the Hickey’s pharmacy group and a number of healthcare services bolt-on deals. In recent months, it acquired Boston-based healthcare consultancy company Inspired Health and Dutch pharmaceutical services business BModesto Group.
It also agreed in September to buy the Dublin-headquartered McCauley Pharmacy Group for an estimated €50 million from investment fund Carlyle Cardinal Ireland and the chain’s founder, Sam McCauley. The value of that deal, which is also subject to approval from the CCPC, is included in the €380 million-plus total transactions figure since the IPO.
Shares in Uniphar fell almost 3 per cent to €3.07 on Thursday to give the company a market valuation of €836.8 million. The stock has declined by 14 per cent since the end of last month, a period during which the Iseq overall index of Irish shares has dipped by 2.5 per cent.
