Private Equity firm Leapfrog Investments has sold a 30 percent stake in regional healthcare chain Goodlife Pharmacy to pan African medicine distributor CFAO Healthcare.
The two firms did not disclose the financial consideration of the deal but said that Leapfrog will still be the majority shareholder after the sale.
Earlier last month, Goodlife raised $12 million (Sh1.38 billion) in debt financing from French development finance institution Proparco to fund the expansion plan and strengthen its supply chain.
Private Equity firm Leapfrog Investments has sold a 30 percent stake in regional healthcare chain Goodlife Pharmacy to pan African medicine distributor CFAO Healthcare.
The two firms announced the sale at the end of last month, marking Leapfrog’s first partial sale of the stake in Goodlife that it acquired in 2017 from fellow PE firm Catalyst Fund for Sh2.2 billion.
The two firms did not disclose the financial consideration of the deal but said that Leapfrog will still be the majority shareholder after the sale. In the 2017 purchase, Leapfrog had not disclosed the size of the stake bought from Catalyst.
The sale will see CFAO Healthcare, which operates in 23 African countries, become the second-largest owner of Goodlife.
“For the past decade, CFAO Healthcare has been actively pursuing a strategy of value-chain integration, first upstream with our entry into the pharmaceutical manufacturing industry, and now downstream with the Goodlife transaction,” said CFAO Healthcare chief executive officer Jean-Marc Leccia.
“This is the first step towards establishing CFAO Healthcare as a major retail pharmacy player in Africa.”
Goodlife was founded in 2014, initially trading as Mimosa Pharmacy, and sells health, personal care, and beauty care products while also incorporating consultation, testing, and vaccination services as part of its offering.
The firm currently runs 96 outlets in Kenya and Uganda, serving up to 1.7 million people, and is aiming to raise its footprint to 250 outlets by 2025 serving over 8.5 million people.
Earlier last month, Goodlife raised $12 million (Sh1.38 billion) in debt financing from French development finance institution Proparco to fund the expansion plan and strengthen its supply chain.
It has previously also received a $3 million (Sh345 million) cash injection from Leapfrog in 2019, and in 2015 the chain also got a Sh405 million loan from the International Finance Corporation (IFC).
Healthcare has become one of the main investment areas for private equity firms in Kenya over the past decade, mainly targeting pharmacy chains and private hospitals.
The firms are attracted by the rising demand for quality healthcare services in a country where public healthcare remains wanting.
In 2013, Kenyan-based investment fund Fanisi Capital took up a majority stake in Haltons Pharmacy for $3 million (Sh345 million) before offloading it to Ghanaian prescription drugs company mPharma for $5 million (Sh575 million) in 2019.
