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Insolvent Medipharmacy bought out of administration by rival chain Enimed

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Insolvent Medipharmacy bought out of administration by rival chain Enimed

The independent pharmacy group Enimed has acquired rival pharmacy chain Medipharmacy after it fell into administration owing creditors more than £23 million.

Medipharmacy Group, which had 25 branches across London, Kent, Surrey and West Sussex, owed £23,622,753 before the Enimed deal was secured, according to a report by the administrator FRP.

Enimed took the number of branches it owns 26 across Berkshire, Buckinghamshire, Hertfordshire, London, Middlesex, Surrey, Sussex, West Midlands and West Yorkshire after its purchase of Manichem Pharmacy Group in 2019.

FRP’s report said Medipharmacy, which had diversified into pharmaceutical wholesaling in the last decade, had three term loans with the bank Santander worth £5.5 million and £6.5m in a revolving credit facility as well as another £550,000 it provided in December 2023 to help the chain “meet crucial payments during the (accelerated acquisition and merger) period.” Medipharmacy also had a £3.4 million debt purchasing facility with RX and owed £2.6m to HMRC in VAT payments.

Medipharmacy’s three directors were Naveen Khosla, Sadhna Kosia and Sandeep Krishen Khosla. FRP said Naveen Khosla and Sadhna Kosia stepped back from day-to-day operations for “personal reasons” while their son Sandep Khosla took over until the administrator was appointed.

FRP said Medipharmacy grew “exponentially” from revenues of £27.9 million in the 2022 financial year (FY) to £69 million in the following year. The report added that growth “was traditionally achieved” by Medipharmacy’s acquisitions of independent pharmacies but its expansion was “principally attributed to a ramp-up in wholesaling.”

However, FRP said the increase in revenues “did not deliver corresponding improvements” in Medipharmacy’s profits. Its earning before interest, taxes, depreciation and amortization fell from £1.7 million in FY 2022 to a loss of £5.8 million in FY 2023. FRP said that “deterioration” was “due to wholesaling losses of 12 per cent at gross profit level in FY 2023.” Its wholesale operation was wound down in August last year.

Medipharmacy had 150 employees and 50 self-employed contractors in the UK including drivers and pharmacists. According to The Evening Standard, the Enimed deal saved those 150 jobs and preserved 25 sites in London and the surrounding counties. Independent Community Pharmacist has contacted Enimed for comment.

“It has been a priority for us to ensure the continuation of services for local communities amidst what is a turbulent period for the wider pharmacy sector,” said Tony Wright, partner at FRP and joint administrator of Medipharmacy Limited.

“We’ve worked quickly to find a viable solution to take the Medipharmacy stores forward and support its customers. We wish the management team and employees all the best for the future.”

 

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