Zur Rose grows in Germany with Medpex deal

Zur Rose grows in Germany with Medpex deal
Medpex says it is Germany's third-largest online pharmacy

19 October 2018 - Deborah Wilkes

Switzerland's Zur Rose Group – the online pharmacy that owns DocMorris – is expanding its presence in Germany by acquiring the e-commerce business of Medpex in a deal worth around EUR120 million (USD138 million) plus earnouts.

Zur Rose said the deal would increase its market share in Germany, which is Europe's largest online pharmacy market, to 31%. It would also lift Zur Rose's active customer base in Germany to more than five million, added the company.

The deal comes soon after Zur Rose announced that it was strengthening its presence in Germany through a "strategic collaboration" with omnichannel pharmacy apo-rot (click here to read the News story).

Zur Rose said the Medpex business was the third-largest online pharmacy in Germany with 1.5 million active customers. It recorded sales of EUR139 million in 2017, representing a rise of 24% compared to 2016.

Complements DocMorris

The Swiss company pointed out that the Medpex business was "highly complementary" to its DocMorris subsidiary in Germany. DocMorris was market leader in the prescription and OTC medicines segment, said Zur Rose, while Medpex focused on OTC medicines and pharmacy-exclusive cosmetics.

The Medpex business was "oriented towards a young customer group with high purchasing power", added Zur Rose, and it had a "high level of competence in digital marketing and the development of agile platforms".

Zur Rose noted that the Medpex business included the software and IT operation Comventure, the marketing operation Visionrunner, the wholesale and logistics unit Medpex Wholesale, and the Esando e-commerce pharmacy based in the Netherlands.

Faster access to the European market

Ulrich Spindler, representing Medpex shareholders, said Zur Rose's international presence would give the Medpex business "faster access to the European market". "We will also benefit from additional economies of scale, for example, in purchasing, and broader expertise in European regulatory affairs," he added.

Following completion of the deal, the founders of Medpex will become shareholders in Zur Rose and will retain their executive roles within Medpex.

Zur Rose said the transaction, which should be completed in the first quarter of 2019, would be financed by a capital increase of around CHF200 million (USD201 million).

Details of the deal

The purchase price is split into three parts: an initial cash consideration; a smaller part payable in newly-issued Zur Rose shares; and two earnouts in 2019 and 2020. 

Zur Rose said the initial cash and shares purchase price would be approximately 0.7-times the 2018 sales of the Medpex business, which are expected to be approximately EUR170 million.

The total purchase price, including the earnouts, would be approximately 1.0-times the expected 2018 sales.

Results for first nine months of 2018

Zur Rose, which describes itself as "Europe's leading online pharmacy", reported sales of CHF889 million in the first nine months of 2018, representing a rise of 25% compared to the same period a year earlier. Excluding acquisitions and at constant currencies, organic growth was 9%.

The company's German business generated 56.0% of sales, and the Swiss business accounted for a further 43.8%. The remainder came from the Spanish managed e-commerce platform Promofarma, which was acquired in September 2018 (click here to read the News story).

Zur Rose said sales at its German business had increased by 43% as reported, or 35% at constant currencies, to CHF498 million, following the acquisitions of online pharmacies Eurapon and Vitalsana.

OTC sales by the German business were up by 83% as reported, or 73% at constant currencies, to CHF269 million.

Sales at Zur Rose's Swiss business increased by 7% to CHF390 million in the first nine months of 2018.

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