Vietnamese retailer FPT Digital Retail JSC (FPT Retail) plans to sell a minority stake in its wholly-owned subsidiary FPT Long Chau Pharma, DealStreetAsia has learnt.
Over the past few months, FPT Retail has been in talks with potential suitors, including private equity firms, for the deal, which could be valued at $100-150 million, according to sources aware of the developments.
The retailer has also appointed Swiss investment bank UBS as an advisor for the proposed stake sale in the pharmacy retail chain.
Mergermarket had reported on the possible stake sale last month. In April this year, local media reported that FPT Retail intends to raise capital through a private offering of 10% of Long Chau Pharma’s shares to investors.
DealStreetAsia has reached out to FPT Retail regarding the plans.
In 2023, Long Chau Pharma’s revenue increased 66% year-on-year to nearly 15,888 billion Vietnamese dong ($629 million), accounting for half of FPT Retail’s total revenue, according to an announcement on the company’s website.
Long Chau Pharma also runs vaccination centres besides pharmacies, though the former account for only a small portion of its revenues.
In the first quarter of 2024, the company added 90 stores, bringing the total number of pharmacies it operates to 1,587, show data from ACBS Research, a local provider of financial services. In comparison, rivals Pharmacity and An Khang run 896 and 526 stores, respectively.
Long Chau Pharma has been focusing on attracting high-value customers such as those with chronic diseases who have a frequent demand for prescription drugs, according to ACBS Research.
In its recent annual general meeting, Long Chau Pharma said it targets to introduce more services such as a comprehensive healthcare strategy for its customers, starting with its expansion into vaccination centre chains.
The pharmaceutical sector in Vietnam has been abuzz with activity lately.
DealStreetAsia in May reported that pharmacy chain Pharmacity is understood to have raised a financing round from the American distressed asset investment firm Avenue Capital Group. The investment, a mix of equity and debt, was made last year, multiple sources aware of the matter told DealStreetAsia. One of the sources said the deal value was around $40 million.
In November this year, Vietnam-based private equity firm Asia Business Builders (ABB) invested in local integrated pharmacy company Duoc Vuong Group. Established in 2012, the Hanoi-based company operates an online ordering platform to streamline pharmaceutical access for pharmacies nationwide by providing timely, accurate updates on product availability, variety, and pricing trends, to help pharmacies with their purchasing and inventory decisions.
Last year, ABB exited pharmacy retail chain Trung Son, as South Korea’s Dongwha Pharmaceutical acquired a 51% interest in the firm for 39.12 billion won ($30.2 million).
In May 2023, Buymed, a local online medicine marketplace, raised $51.5 million in a Series B funding round from investors including US International Development Finance Corporation (DFC), UOB Venture Management, South Korea’s Smilegate Investment ($2.5 million) and Cocoon Capital.
