Chemist Warehouse founders Sam and Jack Gance, Mario Verrocchi could be worth $15bn after Sigma shares surge
Having met in 1980 in northern Melbourne, the trio have gone on to build an Australian retail powerhouse and their deal to merge Chemist warehouse with Sigma could result in a share bonanza.
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The billionaire Chemist Warehouse founders could emerge with a $15bn share bonanza when it merges with the ASX-listed Sigma Healthcare.
The deal, first announced almost a year ago, cleared an important milestone when the competition regulator said it would not oppose the proposed transaction after a long examination lasting several months.
Sigma shares responded by surging as high as $2.70 or up about 40 per cent in trading on Thursday morning.
At that level, and based on the original terms of the deal announced in December last year, Chemist Warehouse founders Jack and Sam Gance and Mario Verrocchi will emerge with huge shareholdings.
Based on a $2.70 Sigma share price and with the original terms of the deal, the Gance brothers would have shares worth $8.32bn.
Mr Verrocchi would have a shareholding worth about $6.96bn.
“We welcome the ACCC’s decision. Chemist Warehouse has a history of driving innovation and competition, based on a high volume, low prices model. Our entry into the pharmacy industry in 2000 added a new dimension to competition in that industry, leading to a more competitive and dynamic industry as a result,” he said in a statement on Thursday.
With other assets, the Gance brothers and Mr Verrocchi would likely be headed for the top 20 of The List – Australia’s Richest 250, when the 2025 edition is published early to mid next year.
Other shareholders of Chemist Warehouse, about 200 people potentially including other members of the Gance and Verrocchi families, would have about $11.5bn of shares based on a Sigma share price of $2.70.
Sigma announced the deal with the privately-held Chemist Warehouse, effectively a reverse takeover, just before last Christmas.
The Gance brothers and Verrocchi are set to hold about 49 per cent of the combined entity’s shares, which will be subject to escrow conditions, and other non-escrowed Chemist Warehouse shareholders will have almost 37 per cent.
The three founders would also take some money off the table as part of the deal, sharing $700m in cash.
The Gances and Mr Verrocchi have built Chemist Warehouse into a retail powerhouse, with sales of their centrally-held private company CW Group Holdings – a major chunk of the entire Chemist Warehouse business – reaching almost $3.3bn in the 2024 financial year.
CW Group made a $541m net profit and paid its shareholders $365m in dividends, including $148m paid in September.
The Chemist Warehouse founders have long considered an initial public offering on ASX, but Mr Verrocchi told The Australian last year that the sheer cost of a transaction was an issue.
“I’m no banker but what I saw with an IPO is it’s extremely expensive, hundreds of millions of dollars, and it’s a long process” he said.
“I think this deal is quick, effective and gives us a pathway to the ASX, which is a good liquidity [event] for us and our shareholders.”
Chemist Warehouse initially mooted the idea of a listing in late 2020 and hired Rothschild to prepare the business for the float. That followed earlier speculation Perth-based conglomerate Wesfarmers was considering an acquisition.
Chemist Warehouse has been an intensely private business for decades, and was formed after Mr Verrocchi met the Gance brothers in the gritty north Melbourne suburb of Reservoir after graduating with a pharmacy degree from the University of South Australia in 1980,
That partnership has turned into one of Australia’s biggest retail success stories, with the overall Chemist Warehouse Group now boasting almost $7.9bn in annual sales across more than 600 stores in Australia, New Zealand, Ireland and China.
Its founders will prepare documents by the end of the year, including a scheme booklet, for Sigma shareholders to vote on the deal in the first half of 2025.
Originally published as Chemist Warehouse founders Sam and Jack Gance, Mario Verrocchi could be worth $15bn after Sigma shares surge
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