Neighbourly Pharmacy to acquire 20 pharmacies in Alberta

Neighbourly Pharmacy, a Toronto-based network of community pharmacies, has agreed to acquire 20 pharmacies located across Alberta.

Neighbourly Pharmacy, a Toronto-based network of community pharmacies, has agreed to acquire 20 pharmacies located across Alberta. The purchase price is C$41 million. Neighbourly, which went public earlier this year on the Toronto Stock Exchange, is a portfolio company of Canadian healthcare private equity firm Persistence Capital Partners.

PRESS RELEASE

TORONTO, Oct. 7, 2021 /CNW/ – Neighbourly Pharmacy Inc. (“Neighbourly” or the “Company”) (TSX: NBLY), Canada’s largest and fastest growing network of independent pharmacies, is pleased to announce that the Company has entered into a binding agreement to acquire 20 pharmacies located throughout Alberta (the “Acquisition”). The Acquisition has a purchase price of $41.0 million, which will be funded from cash on hand, is consistent with the Company’s historical acquisition multiples and will be immediately accretive.

Both the Acquisition and an additional acquisition of a single independent pharmacy are expected to close within Neighbourly’s third fiscal quarter, pending customary regulatory approvals. The Company estimates these 21 locations generated approximately $7 million of Adjusted EBITDA1 for the acquired locations’ most recently completed fiscal years. Upon completion of these acquisitions, the Company’s network will comprise a total of 167 locations across Canada.

“These 20 locations are remarkably well-run pharmacies that act as pillars of healthcare within their communities,” stated Chris Gardner, Neighbourly’s Chief Executive Officer. “Their focus on patient care makes them an ideal partner as Neighbourly continues to execute upon its acquisition strategy, successfully integrating pharmacies and driving incremental value throughout our expanding network.”

“Given our shared values, this acquisition also underscores Neighbourly’s position as the acquirer of choice for Canadian pharmacy owners,” continued Mr. Gardner. “This position has been built upon both our patient-first focus and our scalable, seamless integration process, which is designed to protect the legacy an owner has established among their staff, their patients, and community. We look forward to applying this process with our new locations, and welcoming their talented teams to the Neighbourly family.”

The 20-location network employs more than 200 team members, and comprises 18 community pharmacies, one compounding pharmacy, and one central fill pharmacy across Alberta. Upon completion of the Acquisition, Neighbourly will become one of Alberta’s largest community pharmacy operators, with 52 pharmacies located throughout the province.

Given Neighbourly’s accelerated pace of acquisition, as well as the increased costs associated with becoming a public company, the Company anticipates that its corporate, general, and administrative costs will increase to approximately $3.6 million for the second quarter 2022, while still demonstrating improved operating leverage as it continues to expand its pharmacy network.

1 Adjusted EBITDA is a non-IFRS financial measure and does not have any standard meaning under IFRS. Refer to “Non-IFRS Measures” of this news release for additional information.

About Neighbourly Pharmacy Inc.
Neighbourly is Canada’s largest and fastest growing network of community pharmacies. United by their patient first focus and their role as essential and trusted healthcare hubs within their communities, Neighbourly’s pharmacies strive to provide accessible healthcare with a personal touch. Since 2015, Neighbourly has expanded its diversified national footprint to include 167 locations, reinforcing the Company’s reputation as the industry’s acquirer of choice.