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Ebos to expand in Australia

NZ Newswire logoNZ Newswire 3/08/2016 Paul McBeth

Ebos Group plans to beef up its Australian retail pharmacy exposure selling its 270-store Chemmart business to Terry White Group and taking a 50 per cent stake in the enlarged pharmacy chain.

The deal is subject to several conditions, including Terry White Group shareholder approval, and is expected to be wrapped up in late October, Christchurch-based Ebos said on Thursday.

Once completed, Terry White Group's retail network will expand to 500 and its financial statements will be consolidated into Ebos's accounts.

The New Zealand company will receive shares for the sale of Chemmart's assets and inject an undisclosed amount of new capital to lift its stake to 50 per cent, with chief executive Patrick Davies taking a seat on the board.

Ebos said the expected earnings impact isn't material with retail pharmacy accounting for about 6 per cent of its gross operating revenue.

"The pharmacy industry is positioned for growth with Australia's ageing population and positive community attitudes towards health and wellbeing," Mr Davies said.

Earlier this year, Mr Davies said Ebos's businesses were spitting out enough cash to allow for more acquisitions while meeting its policy of paying 60-to-70 per cent of net profit in dividends.

The company transformed itself in 2013 with the purchase of Australian pharmaceutical wholesaler and distributor Symbion, and has since bought New Zealand vitamin and herbal tea maker Red Seal, pharmaceuticals firm Zest, Australian pharmacy retailer Good Price Pharmacy Warehouse and the BlackHawk Premium Pet Care pet food business.

Brisbane-headquartered Terry White Group reported a profit of $A1.5 million ($NZ1.58m) from continuing operations on a 44 per cent increase in revenue to $A32.9m in the six months ended December 31.

In a separate statement, Terry White Group says shareholders will vote on the proposal at special meeting next month.

Ebos shares were unchanged at $16.50, and have gained 20 per cent this year.

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