Valiant exits Japanese drug dispensary group

Reports out of the Nikkei claimed that Alfresa Holding Co., Ltd., Medipal Holdings Co., Ltd. and Toho Holdings were the new shareholders. A spokesman at Alfresa confirmed the details.

Valiant and the Iwasaki Family took Hanshin Dispensing Pharmacy private through an MBO in 2007. The Iwasaki Family and their holding company now together own a 50.1% controlling stake, which includes shares the family has held since the MBO. While Valiant declined to comment, it is understood that the remaining 49.9% was sold by the firm to the three pharmaceutical groups for JPY7 billion ($84.2 million).

The exit appears to have been well-planned before Valiant took control of the company through a TOB to delist the Hanshin Dispensing from JASDAQ in 2008. "The exit result was what we anticipated, though selling a controlling stake back to the founding family was not originally planned. That said, [the Iwasakis] expected to take a core position in terms of capital and management. We understand their ideas and tried to get agreement from the individual buyers before the exit was finalized," said a Valiant Partners executive.

The group also noted that they "worked with the founding members to reassess capital management, improve performance and improve human resource systems, which has led us to our end target." Sales for the fiscal year ending March 2011 are slated to hit JPY33 billion ($397 million).

From late 2006 to mid-2008, drug dispensary businesses became M&A targets by drugstore chain operators that were finally allowed to own them. Increased competition in the drugstore space had led to a proliferation of new chains. A report by Deloitte shows that the number of drugstore operators rose 300% from 2000 to 2008. Following the change in rules, many drugstores looked to expand their business operations by purchasing dispensary companies in an effort to capture market share. Industry watchers believe that there will be further activity in the industry as pharmaceutical companies look to buy up these new, larger groups.

The Iwasaki family established Hanshin Dispensing Pharmacy Co. in 1975 with one flagship store in Kobe. The company now operates 123 outlets with 1,078 employees.

 

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• Topics
• Exits
• North Asia
• Healthcare
• Valiant Partners Co.