SIGMA Healthcare shares were briefly placed into a trading halt on the Australian Securities Exchange on Fri, after the company's announcement of the sale of its Central Healthcare Services Limited (CHS) division was incorrectly classified as "price sensitive".
Sigma announced it would sell the intellectual property relating to the CHS trademark and logo, its hospital services operations along with designated inventory to Clifford Hallam Healthcare Limited (CH2) (PD 10 Mar).
About half an hour after releasing the news, trading in Sigma's shares was temporarily paused, and then later in the day the company released a supplementary announcement with further details.
"Sigma advises that the consideration for the transaction is approximately $44 million, consisting of approximately $35 million for the designated hospital stock, with the balance of $9 million being allocated to the other assets being sold," the update said.
"Sigma confirms that it does not consider the transaction to be material in the context of the overall Sigma group...the original announcement was released as price sensitive as the result of an administrative error," it continued.
Sigma purchased CHS almost a decade ago (PD 27 Mar 2014), at the time paying $24.5 million for the business.
MEANWHILE Clifford Hallam Healthcare has advised customers that it expects the deal to be finalised by 31 Mar.
"CH2 intends to combine the CH2 and CHS hospital operations to ensure the merged business is at a scale to improve service levels, and ongoing investment in the CH2 hospital business raises the overall offering," the company said.
"CH2 will provide the necessary ongoing financial support, investment in stock, information systems and people to ensure the service CHS and CH2 customers expect, and should receive, is delivered at the highest level for the long term," CH2 said.
The CHS business will become part of the CH2 Hospital division headed up by Pierre Wassef, while at a local level customers will be looked after by CH2's pharmacy Business Development Managers.
"Sigma Healthcare will stop trading to customers at the close of business on the 31 Mar 2023 and the CHS customers will start to operate within the CH2 hospital pharmacy business from the 01 Apr 2023," the company added.
CH2 CEO David Collins said that as the majority of customers are already dealing with both wholesalers, it is the intention to provide the lowest price of the two organisations.
"Strategically the CHS and CH2 hospital operations are a very good fit...both businesses are specialist healthcare wholesalers.
"Both organisations service the same customers and supplier base.
"CH2 has a strategy of continuing to increase in scale in our hospital division...both CH2 and CHS hospital businesses are currently subscale and deliver negative or low return on the invested capital.
"It is our view that increasing scale into this sector for CH2 will support this division in achieving an acceptable and sustainable return," the CH2 CEO said.
Collins added that "we see this as another important step in advancing CH2's commitment to Australian healthcare, and will further streamline the business to fully support the hospital sector".
The above article was sent to subscribers in Pharmacy Daily's issue from 13 Mar 23
To see the full newsletter, see the embedded issue below or CLICK HERE to download Pharmacy Daily from 13 Mar 23
