The company was forced to enter into administration following increased creditor and cashflow pressures.
Medipharmacy has been bought out by PI-Gen Pharma Limited, an arm of the independent pharmacy group Enimed, for a total of £7.1 million, after the business entered into administration.
In a report published on Companies House on January 30, administrators at FRP confirmed that the transaction was completed on 18 January, with PI-Gen beating five other bidders to acquire the insolvent NHS pharmacy chain.
The report added that PI-Gen submitted a cash offer of non-refundable £500k for Medipharmacy’s goodwill, £2.1m for its freehold properties, and a further amount for its fixtures and fittings, motor vehicles and stock.
An FRP spokesperson told The Standard that Medipharmacy, which operated a chain of 25 NHS community pharmacies across London, Kent, Surrey and West Sussex, had faced increasing cashflow challenges in recent months.
According to the administrators’ report, Medipharmacy’s revenues had grown exponentially from £27.9m in 2022 to £69m in 2023 but didn’t deliver corresponding improvements in profitability.
Despite increased revenues, its earnings before interest, taxes, depreciation, and amortisation (EBITDA) reduced from £1.7 in 2022 to a loss of £5.8m loss in 2023, said the administrators.
The company’s wholesaling operation was wound down in August 2023, and creditor arrears had reached approximately £19.9m by then, resulting in significant cashflow pressure.
In September, Sandeep Khosla was appointed as the company’s new director, after SK and NK stepped back from day-to-day operations due to personal reasons.
Following increased creditor and cashflow pressures as a result of the wholesale losses, Sandeep took legal advice, after which he was referred to FRP “to provide advice.”
At the time of the appointment of FRP, Medipharmacy had three term loans totalling £5.5 m and a RFC drawn at £6.5 m with Santander, as well as a £3.4 m debt purchasing facility at a 75 per cent advance rate from RX, according to the report.
