Proparco, the French development finance institution, has invested 13 million euros (Sh2.1 billion) to acquire an undisclosed stake in Kenya’s pharmaceutical distributor Harley’s.
Proparco joins Mauritian conglomerate IBL Group, which was the first to announce earlier this year that it was leading a consortium of institutional investors to buy a majority stake in Harley’s from the founding family.
“Proparco’s goal is to expand the supply of medicine and health products in Kenya, Uganda, and Tanzania,” the French fund said in a statement.
Based in Nairobi’s Westlands, Harley’s supplies pharmaceutical products and medical equipment, including drugs, hospital beds, intravenous poles, bedside cabinets, delivery beds, and stainless steel buckets.
The company’s suppliers include Bayer, GlaxoSmithKline, Merck and Roche. It has offices and stock points in five locations: Nairobi (Central), Mombasa (Coast), Eldoret (Western), Dar es Salaam (Tanzania), and Kampala (Uganda). Harley’s started operations in 1953 as a retail chemist. The company was acquired by its current management in 1975.
“Proparco is very proud to support Harley’s and more generally the pharmaceutical and healthcare sector in East Africa, which we believe are key components of development in the region. Harley’s is a historical player in the pharmaceutical sector, making a big impact on the lives of Kenyans, Ugandans, and Tanzanians” said Damien Braud, Head of Equity for Africa and the Middle East at Proparco.
“We are thrilled to partner with Harley’s talented management team and staff, as well as with IBL, to further provide high-quality distribution in the East Africa region. This is also the second joint investment by Proparco and IBL, following the transaction with Naivas, the leading Kenyan retail chain,” he added.
Proparco was also part of the consortium, including IBL, that acquired a cumulative 51 percent stake in Kenya supermarket chain Naivas Limited for an estimated $193.6 million (Sh29.6 billion at current exchange rates).
“The investment and the synergies with IBL’s subsidiary HealthActiv will support Harley's growth plan and are expected to have a positive social impact by promoting job creation and better access to safe medicine, including the development and distribution of pharmaceutical products that may only be marginally available in the region,” Proparco said.
The buyout of Harley’s is the latest in the formal medical distribution sector that has attracted major investors including private equity funds. Regional healthcare chain Goodlife Pharmacy, for instance, has changed hands multiple times as institutional investors seek to benefit from increased spending on healthcare.
Private Equity firm Leapfrog Investments, for instance, sold a 30 percent stake in Goodlife Pharmacy to pan-African medicine distributor CFAO Healthcare.
