EBOS, the NZ based pharmaceutical, and pet care and food products group have picked up a $1 billion a year major drug deal for its Symbion business from the huge Chemist Warehouse Group.
In a statement to the ASX yesterday EBOS said it had signed an agreement with Chemist Warehouse Group (CWG) for the exclusive wholesale distribution of pharmaceutical products to more than 450 CWG stores throughout Australia.
EBOS is in competition with Chemists Warehouse Group through its Terry White Chemmart chain.
EBOS shares rose 0.6% to $20.34.
In October EBOS Group reached an agreement with Terry White Group Limited (TWG) to acquire all of the minority shares in TWG by way of a scheme of arrangement. When the scheme is implemented, TWG will become a 100% owned subsidiary of EBOS.
EBOS, through its wholly-owned subsidiary EBOS PH Pty Ltd, currently holds just over 50% of the shares in TWG, originally acquired on October 2016 31 when the former Terry White Group merged with the EBOS-owned Chemmart business.
The five-year agreement, effective from 1 July 2019, provides for a potential extension of three years. It replaces the contract that Sigma had.
EBOS estimated that sales to CWG stores will generate approximately AUD$1 billion in revenue in the first year of the agreement.
EBOS Chief Executive Officer, John Cullity said in a statement yesterday the contract was an important development for both parties.
“This contract is a very positive endorsement of the capability we have built-in wholesale pharmaceutical distribution and reflects the large investment in facilities, technology and people we have made over the last 5 years,” Mr. Cullity said.
“We look forward to a strong and productive relationship with CWG from 1 July next year.”
Chemist Warehouse Group co-founder and director Damien Gance said that EBOS’ wholesaling expertise and service standards made it a great fit for the CWG network.
“CWG is a dynamic organisation experiencing rapid growth and relies on the expertise of its supply chain partners to service its retail network. EBOS is the leading pharmaceutical wholesaler in Australia and New Zealand and we are pleased to be partnering with them to assist in the growth and development of our network,” Mr. Gance said.
