Chemist Warehouse in talks to list on ASX

Pharmacy giant Sigma Healthcare is expected to announce a major transaction that will lead to the privately owned Chemist Warehouse listing on the Australian stock exchange.

Sources familiar with the transaction said the final touches on the deal were being worked through on Wednesday afternoon that would mean Chemist Warehouse takes majority control of Sigma which, along with owning the Amcal brand, has a large pharmaceutical distribution business.

Chemist Warehouse looks set to become an ASX-listed company.

Sigma asked for its shares to be paused from trading 30 minutes after receiving an inquiry from this masthead regarding the veracity of the rumours. It said in a statement to the exchange that it requested its shares to be halted from trading pending an announcement regarding a “potential material transaction”.

Chemist Warehouse has been working towards an ASX listing for most of 2023, with its founding families looking to expand the big box pharmaceutical retailer. Since being founded in Melbourne in 2000 by Jack Gance and Mario Verrocchi, Chemist Warehouse has grown into one of Australia’s most recognisable retail brands and is valued at more than $5 billion. The families also retain large property holdings that include several large Chemist Warehouse stores.

The parties had expected to announce the deal on Monday but could bring forward the statement to Friday in the wake of media inquiries about the deal.

The listing of the company is expected to crystallise the wealth of the Gance and Verrocchi families, which has been estimated to be in excess of $2.4 billion each.

Sources speaking on the condition of anonymity due to confidentiality agreements said Chemist Warehouse had been pushing for a deal to take board control of the ASX-listed Sigma and majority ownership in the group. As part of the transaction, shareholders could be tapped for $350 million to help tidy up Sigma’s balance sheet and provide more liquidity, though the final shape of any capital requirements was still being worked out.

Sources said the Sigma board would comprise representatives from Sigma and Chemist Warehouse.

The sources said HMC Capital boss David Di Pilla was involved in the transaction and was expected to take a board seat at the newly merged entity. HMC Capital has been contacted for comment.

HMC Capital, which manages listed and unlisted investment vehicles focusing on property and consumables, has been assisting Chemist Warehouse with its plans, including considering a potential ASX listing via a reverse listing through Sigma. A fund HMC Capital manages owns a 19 per cent stake in Sigma, and the Gance and Verrocchi families are investors in its vehicles.

Sigma’s shares had risen 2.7 per cent in morning trade ahead of the trading halt. The company’s market capitalisation currently sits at $730 million. The end value of a combined group is currently not known.

Chemist Warehouse recorded revenue of more than $3 billion for the year to June 30, according to accounts filed by the private company with the corporate regulator.

The transaction is expected to elicit interest from regulators given it would create a “change of control” event for Sigma, which has licences to distribute pharmaceuticals. The deal is also expected to pique the interest of the Australian Competition and Consumer Commission.

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