Mimosa Pharmacy eyes Sh405m from IFC for new stores
Haltons Pharmacy in Nairobi, which was last year bought by PE fund Fanisi Capital to help its expansion. PHOTO | COURTESY
What you need to know:
The IFC said its investment in Mimosa should result in the pharmacy chain increasing the number of customers and job creation.
Mimosa is expected to add more than 50 stores in the region over the five years and to rebrand to Goodlife.
IFC says increasing the number of branches will serve as an example to the pharmaceutical industry to create structured brands, which should result in customers getting higher quality products and at a lower cost.
The International Finance Corporation (IFC) is proposing to lend the Mimosa Pharmacy chain Sh405 million, a quarter of the Sh1.64 billion the pharmacy will use to expand its business over the next five years.
The IFC said in disclosure documents that the proposed loan would see the pharmacy open new stores in Nairobi and other major cities in East Africa.
Catalyst Principal Partners, a private equity firm, and Africa Chemist & Beauty Care of Mauritius, bought into the chain in September for an undisclosed amount.
Chris Getonga, the founder, is the other shareholder in the pharmacy chain.
Mimosa is expected to add more than 50 stores in the region over the five years and to rebrand to Goodlife.
The IFC said its investment in Mimosa should result in the pharmacy chain increasing the number of customers and job creation.
“The project is expected to, among others, increase availability of quality healthcare products to more than two million Kenyans per annum after the expansion is completed and create over 200 new direct employment for local communities during operations,” said the disclosure documents by the IFC.
The financier added that increasing the number of branches will serve as an example to the pharmaceutical industry to create structured brands, which should result in customers getting higher quality products and at a lower cost.
Reading from that script is private equity firm Fanisi Capital, which bought Haltons, a pharmaceutical chain targeting the middle and low-income market, in September 2013 for Sh263 million.
Fanisi’s managing partner Ayisi Makatiani has recently said the pharmaceutical industry is fragmented and ripe for consolidation.
A growing population and customers actively spending on health and beauty products are creating a market for players in the pharmaceutical business.
Larger players in the industry are also investing by partnering with both private and public sector.
Swiss pharmaceutical conglomerate Novartis, for example, is expanding into the region, using Nairobi as its base.
“Kenya now serves as a regional hub for Novartis, supporting our business expansion across East Africa and I’m excited that we are gradually expanding our work to match the broader Kenyan government’s healthcare priorities,” said Novartis chief executive Mo Metwally.
Novartis said the Kenyan market generated around Sh890 million in sales last year.
For the IFC, the proposed investment in Mimosa will be sixth deal for the World Bank’s private lending arm in this financial year.
The IFC has made investments through debt, equity or a mix of the two in Chase Bank, DTB, NIC, Bidco and National Cement.
Last month it announced that the 100 megawatts Kipeto Wind Project, whose construction is expected to begin in the first quarter of next year in Kajiado County, will pay five per cent of generated revenues to the local community in that area.
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