SHAREHOLDERS in Terry White Group Limited have approved the company's merger with Chemmart (PD 04 Aug) at an extraordinary general meeting held last Fri.
The vote was almost unanimous, with shareholders representing 99.98% of TWC shares voting in favour of the deal.
A presentation during the meeting also for the first time made public details of the deal, which will merge Chemmart into TWG creating "one of Australia's largest retail pharmacy networks with approximately 500 pharmacies and $2 billion in retail turnover".
225 of those stores come from the Terry White Chemists and Chemplus brands, with a turnover of about $1.1 billion and approximately 7% market share.
Chemmart will contribute 268 stores turning over about $900m, with the combined group to have a "comprehensive national footprint" and a 13% market share overall.
The merger will see EBOS Group Limited sell the Chemmart franchise business to TWG, as well as investing $18 million in cash, in return for new shares in Terry White Group, which will see EBOS end up with a 50.000002% stake in the company.
At the same time Terry White Group will return $13 million of capital to existing shareholders "from its own cash reserves and borrowings," with this part of the transaction structured as an "equal access capital reduction of $0.984 per share".
An independent expert report commissioned as part of the deal has concluded that the merger is fair and reasonable to TWG shareholders - and notes that the merged entity is better positioned for a possible public share offering.
The report estimates TWG shares after the merger will be worth $3.94 each after the 98c capital reduction, on a "capitalisation of maintainable earnings basis".
TWG chairman Terry White said "the size of this transaction is unprecedented in our industry and will create a new force within Australian pharmacy.
"Our vision is to become the leader in community pharmacy in Australia and customers' first choice for health and value," he told shareholders.
With the approval of the deal, the merger is now expected to be finalised on 31 Oct 2016, with existing TWG shareholders to receive their $13 million capital reduction payout on 21 Nov.
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