October 2002 issue Pharmacy Today magazine

API BUYS ZUELLIG

Zuellig Pharma and PSM Healthcare are now Australian owned following Australian Pharmaceutical Industries' (API) successful acquisition of Interpharma.

But according to Zuellig Pharma chief executive Peter Merton, it will be "business as usual" for the New Zealand wholesaler, except for the likelihood of a name change.

Zuellig had already been looking at a name change in New Zealand where the company has a pot pourri of name associations through recent acquisitions and business expansion including Sigma, Russells, PWR, Zuellig and Healthcare Logistics.

The $A113 million API buyout of Zuellig's Australian and New Zealand operations includes Zuellig Pharma, PSM Healthcare (which was purchased by Zuellig in the late 80s), and Halas Dental.

PSM chief executive Kim Campbell says the move is positive for the company, and will help to expand their products' profile in Australia.

API will issue 29.3 million shares at $3.50 a share to the Interpacific group for the three businesses, plus a maximum cash consideration of $A11million.

Interpacific (formerly known as The Zuellig Group) is the parent company of Interpharma, which owns the three businesses acquired by API.

Interpacific will hold around 13% of API's expanded issued capital, and two representatives from the Interpacific team will join the API board.

The combined annual turnover of the three businesses acquired exceeds $A600 million. Zuellig Pharma is by far the largest with expected annual turnover to December 31 this year of $A500 million. PSM's turnover is expected to be $A30 million and Halas Dental $A100 million.

In a case if déjà vu, the buyout sees Amcal and Guardian banner groups revert to Australian ownership. Both groups were owned by Australian company Sigma, prior to Zuellig Pharma's acquisition of Sigma's New Zealand operations. API will also acquire the Vantage group, and a 40% shareholding in Unichem. This will become a 50% stake in Pharmalliance once the merger between Unichem and the Zuellig retail brands is finalised.

API managing director David Young says the acquisition fits directly within API's strategy for future growth through being a participant in a larger volume business.

He said there would be substantial growth opportunities available to each of the businesses through the acquisition.

And Peter Merton agrees. He says PSM will benefit from a larger market for its manufacturing operation, and there would be synergies for the various retail banner group operations.

API also wants to set up a third party logistics operation like Zuellig's Healthcare Logistics business here.

API was established in 1910 as a chemist's co-operative and listed on the Australian Stock Exchange in 1997. It has four core business operations - pharmaceutical distribution, manufacturing, retail pharmacy services and hospital and medical distribution.

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