The 21.1% minority stake was acquired from Phoenix Medical Supplies Limited (“Phoenix”), the leading pharmaceutical wholesaler, which has held its stake since before EMIS Group acquired 78.9% of Rx in 2010. Phoenix, which owns more than 500 pharmacies in the UK, is a significant user of Rx's systems and services, and is expected to remain an important customer of the Group going forward.
The consideration for the purchase is £8.0 million in cash, which has been funded out of EMIS Group’s existing cash reserves. Prior to completion, Rx paid a dividend to its shareholders of £19.0 million from its accumulated reserves, of which £4.0 million was paid to Phoenix with the balance retained within the Group.
For the year ended 31 December 2017, Rx contributed revenues of £21.9 million and a segmental operating profit of £5.6 million to the Group. The transaction is expected to be immediately earnings enhancing for EMIS.
Commenting on the purchase, EMIS Group CEO Andy Thorburn said:
“Rx has been an important contributor to EMIS Group since 2010 and Phoenix a valued partner, co-investor and customer throughout that period. We are pleased to have come to this agreement and to consolidate full control of Rx which, as the market-leading community pharmacy solution, remains central to the Group’s strategy of providing connected healthcare software and services across every major UK healthcare setting.”