SIGMA Pharmaceuticals, one of Australia’s largest listed pharmacy brands, has acquired the Discount Drug Stores portfolio for $26.7 million.
The deal will add 121 outlets to Sigma’s existing network of brands including Amcal, Chemist King and Guardian.
DDS will become part of Sigma’s subsidiary Central Healthcare Services, which it purchased in March for $24.5m.
Mark Hooper, Sigma’s chief executive, said DDS was a “natural fit” and would broaden the group’s offerings.
He said the vast majority of the 300 stores added through the DDS and CHS acquisitions this year were not existing customers of Sigma’s wholesale division.
“This acquisition brings to our group another strong pharmacy brand with a great operational format and consistency of retail offering,” he said.
“DDS will also bring further wholesaling growth to Sigma as we transition the business over the next 12 months.”
The company expects the purchases will add $400m in new sales revenue to Sigma, and generate $8m to $10m in incremental earnings growth in the first full year of operations.
Sigma announced revenues of almost $3 billion earlier in the year, and a net profit of $53.5m. At the time the company said it would use its “strong cash position” to fund investments and increase the number of private label products.