Ghanaian prescription drugs company mPharma is set to take over Kenyan pharmacy chain Haltons in a transaction estimated to be worth about Sh500 million ($5 million).
The deal, which is subject to approval by the Competition Authority of Kenya (CAK), will help mPharma to spread its network across the East African market.
Founded six years ago by Ghanaian entrepreneur Greg Rockson, mPharma describes itself as a prescription drugs inventory manager.
Kenyan-based investment fund, Fanisi Capital, holds a majority stake in Haltons Pharmacy following a Sh300 million ($3 million) investment in the business in 2013. The pharmacy chain was originally founded by Louis Machogu. mPharma is currently finalising a Sh1.2 billion ($12 million) Series B funding round led by 4DX, an Accra/San Francisco venture capital firm and locally-based Novastar Ventures. It raised $6.6 million in 2017 in addition to a seed round of Sh500 million ($5 million) in 2015.
Mr Rockson says he is keen on streamlining operations of the pharmaceutical supply chain across Africa through a Vendor Management Inventory (VMI) system that is currently used by over 250 pharmacies in Ghana, Nigeria, Zambia and Zimbabwe. The inventory management system is able to control supplies by forecasting demand of prescription drugs and helping in building bargaining power with suppliers, eventually lowering the cost of medicine.
“The drug supply chain in Africa is built on a ‘push’ data model,’’ Mr Rockson says. ‘’Distributors have to wait to receive a purchase order from providers before supplying drugs to them. This model is built on siloed data systems between distributors and providers. As a result, both parties are unable to forecast demand which leads to frequent stockouts,” he said during an interview with a Ghanaian media house.
The looming Haltons takeover follows approval of Dubai-based healthcare company Shalina’s buyout of an undisclosed stake in Kenya’s Pharmaceutical Manufacturing Company, a transaction that expanded the firm’s medicine production and distribution venture to seven countries in Africa.
Shalina deals largely in prescription and over-the-counter medicines that include anti-malarials, antibiotics, anti-inflammatory and nutrition.
It has production facilities in India and China.
The mPharma-Haltons deal also comes shortly after the investment by beauty and drugstore chain Goodlife, which bought out assets of Maghreb Pharmacy. Goodlife Pharmacy has set a target to grow its footprint to 100 outlets regionally.
By ANNIE NJANJA, .nation.co.ke