Imperial secures majority stake in Kenya-based logistics group

Logistics group Imperial Holdings will buy a 70% interest in Kenyan pharmaceutical group Surgipharm for R470m in cash, subject to regulatory approvals.

Surgipharm, headquartered in Nairobi and with offices in Mombasa, is a distributor of pharmaceutical, medical and surgical supplies in the country, with an annual turnover of about R940m. It has more than 330 employees, about 4,700m² of warehousing and its own transport fleet catering to the ministry of health, nongovernment organisations, hospitals, clinics, doctors, pharmacies and wholesalers. Key management will retain their roles.

Imperial says the deal is in line with its African growth strategy to be a partner of multinational companies in the consumer goods and pharmaceutical sectors in southern, eastern and western Africa.

“Our entry into pharmaceutical distribution in Kenya is also opportune at a time where there is GDP growth, rising income levels and a rising middle class in the region,” Mark Lamberti, group CEO of Imperial, said
on Wednesday.

He said Surgipharm had a specialised management team and relationships with multinational pharmaceutical companies. This complemented earlier Imperial acquisitions in the pharmaceutical sector: Imperial Health Sciences; Eco Health in Nigeria; and Imres, a pharmaceutical wholesaler based in
the Netherlands.

Cratos Capital portfolio manager Ron Klipin said on Wednesday that Lamberti was selling out of noncore assets such as Regent Insurance and entering into businesses with potential that were more in keeping with its core logistics footprint. “He’s the man who is turning the company around.”

Imperial expected a double-digit drop in headline earnings per share for the six months to December 2016 on single-digit growth in revenue and operating profit. It blamed foreign exchange losses, higher finance costs and higher amortisation of intangible assets from acquisitions for the fall.

Courtesy of BusinessDay

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