API to offload CH2 stake
November 27, 2015
Australian Pharmaceutical
Industries (API) will take a $2.8
million hit from the sale of its
shareholding in hospital supplies
distribution business, CH2 Holdings
Pty Ltd which trades as Clifford
Hallam Healthcare.
API confirmed yesterday it had
entered into an agreement for the
sale of the business, in which it
holds a 45.5% stake.
Other shareholders include
private equity firm Allegro Funds
Management.
CEO Stephen Roche said that API
had previously advised that CH2
was “not a long term asset that
fitted the strategic direction of the
company”.
He said the sale, to an undisclosed
private buyer, would pay out the
CH2 debt and provide a minimum
of $4 million in cash to API,
meaning the company “books a loss
on the sale of a maximum of $2.8
million after disposal costs”.
Roche said while the loss was
disappointing, the sale would allow
management time and company
resources to be focused on core
assets which would deliver more
value to API shareholders.
An information flyer relating to
the divestment process indicated
CH2 recorded over $900m in
revenue in 2014/15 and services
around 20,000 customer accounts.
Last year API recorded a $21m
impairment in relation to CH2.
The sale is scheduled to settle
early next month.
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