ICA Gruppen announces the acquisition of Apotek Hjärtat AB for $770M.

ICA Gruppen, a Stockholm, Sweden-based retail group, announced getting into an agreement with Altor Fund III to acquire Apotek Hjärtat, Sweden’s largest private pharmacy retailer,

The transaction is valued at SEK 5.7bn ($770M) and is made on a cash and debt free basis.

Altor had bought Apotek Hjärtat in 2009.

The acquisition positions ICA Gruppen as the second largest player in the Swedish pharmacy retail market, as Apotek Hjärtat will join Cura apoteket, a pharmacy operation which ICA established in 2010.

Apotek Hjärtat and Cura apoteket have combined sales amounting to approximately SEK 11bn, of which about SEK 3bn within personal care. Together, Apotek Hjärtat and Cura apoteket will have the number two position on the Swedish market with a market share of around 30 percent.

Apotek Hjärtat is Sweden’s largest private pharmacy chain and was founded in connection with the deregulation in 2009, when 208 community pharmacies where acquired. The business has approximately 2,700 employees and operates 306 pharmacies. Apotek Hjärtat’s operations consist of pharmacy retail in the form of physical pharmacies, e-commerce, inpatient operations and animal pharmacy operations. Apotek Hjärtat’s net sales for 2013 were SEK 8,266 m and for the period January-September 2014 SEK 7,050m. EBITA for 2013 were SEK 345m and for the period January-September 2014 SEK 339m.    

Cura apoteket was founded in 2010 by ICA Gruppen and is ICA’s own pharmacy chain, which is located in large ICA stores across the country. Cura apoteket has grown organically and currently has around 700 employees and 65 pharmacies with a turnover of SEK 2,000m in 2014.

Post completion of the transaction, Apotek Hjärtat and Cura apoteket will be combined into a separate subsidiary of ICA Gruppen and reported as a separate segment. Anders Nyberg, current CEO of Apotek Hjärtat, is contemplated as CEO of the new entity.