Dis-Chem Pharmacy Chain Planning Share Sale in Johannesburg

  • Family-owned retailer may seek cash for expansion, Avior says
  • Dis-Chem is South Africa's biggest chemist chain after Clicks

Dis-Chem Pharmacies (Pty) Ltd., South Africa’s second-biggest retail chain of chemists by number of stores, said the company hired advisers to help with a planned share sale on the Johannesburg Stock Exchange in the second quarter of next year.

The retailer, which competes with Cape Town-based Clicks Group Ltd., isn’t able to say how much it’s looking to raise because the process has just started, Director Rui Morais said in an e-mailed response to questions on Monday. The company is owned and managed by the founders, Ivan Saltzman and his wife Lynette.

“I would think Dis-Chem is looking to raise capital for expansion, perhaps for new store formats,” Kyle Rollinson, an analyst at Avior Capital Markets, said by phone. “At this stage, it’s not a direct play-off between Clicks and Dis-Chem as both are still taking market share from independent pharmacies.”

Dis-Chem is the third company in a week to announce an intention to list on the JSE, after housebuilder Balwin Properties Ltd. and construction-equipment company Waco International Ltd. The exchange had the most first-quarter IPOs this year since 2008 as the FTSE/JSE All-Share Index rose to a record, although activity has since quietened as the gauge has since declined by about 9 percent.

Clicks, which owns 346 medicine dispensaries, the local Body Shop franchise and music retailer Musica, controls about 18 percent of South Africa’s pharmacy market, according to Rollinson. Dis-Chem’s market share is approximately 15 percent, he said.

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