Chemist Warehouse billionaires seal $34bn deal in Melbourne’s gritty north
The Chemist Warehouse founders were back in suburban Melbourne to vote in its huge merger with ASX-listed Sigma. The celebrations were a typically low-key setting for some of Australia’s richest entrepreneurs.
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It was poker night in the sports bar and penne calabrese the bistro special in Melbourne’s north on Wednesday evening, where a $34bn mega deal unfolded about as far away from the corporate world as possible.
The Olympic Hotel in Preston was an unlikely scene for a bunch of newly minted billionaires to turn up, but it was also in keeping with the low-key discount mentality of the retail behemoth that has its headquarters just around the corner in an industrial estate.
On the corner of two busy roads choked with post-work traffic, in a pub built in 1956 for Olympians staying in the nearby Athletes Village for the Melbourne Games, Chemist Warehouse shareholders agreed to the private giant’s merger with the ASX-listed Sigma Healthcare.
Trays of lasagne and coleslaw were laid on, and the roughly 100 shareholders – many of them chemist owners and operators – could also grab a bread roll from an adjacent basket, and a glass of water.
It wasn’t exactly Toorak, as Chemist Warehouse director Damien Gance – who will emerge as a paper billionaire post the deal – noted to The Australian.
“We’re a business that is culturally rich and we’re a northern suburbs [of Melbourne] business,” Gance said.
“We’ve been in Preston, Reservoir, Northlands shopping centre. This is who we are, and this [venue] is consistent with that.”
Preston is a gritty inner-north suburb once full of factories and now starting to be the suburb of choice for hipsters, but still edgy enough for it to be the scene of a gangland shooting the night before.
It is also just up the road from where Sam Gance, Damien’s father, and his brother Jack got their start in business, opening their first chemist in working-class Reservoir in 1972, where they took on Mario Verrocchi as an apprentice eight years later.
“Parmacies were generally bigger and better than the southern suburbs ones,” Jack Gance said of the early days in what was an unfashionable part of town.
“Everyone wanted to live in the south and have pharmacies there. So this was an area where there were less pharmacists, and therefore it was one we went into and thought it was a good strategy.”
Their Chemist Warehouse behemoth – which they started with Verrocchi in 2000 – has continued that tradition of building up in suburbs and areas where others were reluctant to tread, though it is now in more fashionable areas too.
“I remember when we opened our first chemist in the south, at Chadstone,” Verrocchi said with a chuckle. “It was a culture shock for a while.”
The Gance brothers and Verrochi, and plenty of their siblings, children and other family members, have gone on to build a retail and healthcare empire, which will now become one of the biggest listed companies on the ASX when shares in the combined entity begin trading on February 13.
The deal, after a rubber-stamping by Sigma shareholders at the more salubrious Sofitel Hotel in Melbourne’s CBD earlier in the day, cements the billionaire status of Jack and Sam Gance, Verrocchi and now Damien Gance, Sam’s son, as well. And it propels several other family members and company execs towards the ranks of The List – Australia’s Richest 250.
The Gances and Verrocchis have been low-key for two decades, and say they will try to maintain their level-headed disposition.
“I think we spend more time working than we do talking,” Verrocchi said.
Damien Gance added about becoming a public company: “It’s not scrutiny, it’s good governance. And we’ve always prided ourselves on good governance. The fact that we operate in one of the most highly regulated industries, and we do so without a history of stuff-ups, shows that.”
Wednesday’s meeting took 15 minutes to complete. There was a quick round of applause, a single holler, and then, after some mingling and lasagne and coleslaw, the Gances and Verrocchis – now worth a combined $15bn or so – said they would just get on with business.
“We are excited about today. But the thing is that we’ve never, ever stopped and celebrated any of our achievements. We did our first billion dollars, we never had a party,” Jack Gance said. “We just keep looking for our next big thing.”
Originally published as Chemist Warehouse billionaires seal $34bn deal in Melbourne’s gritty north
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