- Wesfarmers (WES) offers to acquire Australian Pharmaceutical Industries (API)
- The company intends to purchase all of API’s shares for $1.38 each, valuing the pharmaceuticals distributor at $687 million
- Washington H. Soul Pattinson, which holds a 19.3 per cent stake in API, has already agreed to vote in favour of the proposal
- The deal offers Wesfarmers an opportunity to break into the growing health and wellbeing industry
- Wesfarmers is up 0.086 per cent to $58.05 per share at 10:56 am AEST
Wesfarmers (WES) has offered to acquire Australian Pharmaceutical Industries (API) as it looks to break into the health and wellbeing sector.
According to the terms of the non-binding proposal, Wesfarmers intends to purchase all of API’s shares for $1.38 each, representing a 21 per cent discount to last week’s closing price of $1.145 per share.
The deal values API, which operates a portfolio of wholesale and retail businesses under the Priceline Pharmacy, Soul Pattinson and Pharmacist Advice brands, at roughly $687 million, and remains subject to several conditions. Those include securing approval from API’s board and the ACCC, as well as the completion of due diligence.
Investment firm Washington H. Soul Pattinson, which holds a 19.3 per cent stake in API — or 95.1 million shares — has already agreed to vote in favour of the proposal.
Rob Scott, Managing Director of Wesfarmers, said the acquisition would form the basis of a new healthcare division for the company, which will be used to invest and develop capabilities in the growing health and wellbeing sector.
“The combination of Wesfarmers and API is a compelling opportunity to capitalise on API’s strengths and positioning in these markets while drawing upon Wesfarmers’ capabilities in retail and distribution, our strong balance sheet and our willingness to invest in our businesses for growth over the long term,” he said.
“Wesfarmers supports the community pharmacy model, including the pharmacy ownership and location rules, and considers API’s relationships with its community pharmacy partners to be one of its key strengths.”
The company said it will finalise its view on the API business during the due diligence period.
Wesfarmers was up 0.086 per cent to $58.05 per share at 10:56 am AEST.