Cdc Buys Out 36% In Melrose

CDC has picked up 36 per cent of the total equity of the company for an undisclosed sum. Sources said the valuation worked out to Rs 27 per equity share at a premium of Rs 17. The deal was engineered by city-based merchant banker Ambit Corporate Finance. CDC will also have a representative on the Melrose board.

The US-based Medicine Shoppe is the world's largest pharmacy franchiser. It has grown by licensing out its brand and know-how to an exclusive franchiser in different countries. This master franchiser -- Melrose -- sub-franchises the brand to local operators and collects royalties on their sales.

 

Melrose has set up eight Medicine Shopppe community pharmacies in the country in the past year. Such a pharmacy necessarily has a resident certified pharmacist attending to clients. It typically personalises service and keeps track of all its customers through a computerised database.

Benefits of ordering from such a pharmacy include special offers and discounts on products, free medical check-ups, patient counselling and a well-recorded history of the patient's drug consumption.

When contacted, Viraj Gandhi, managing director, Melrose, confirmed the move explaining that the funds would serve to boost the company's franchisee development programme. The company's target group is chemists who would like to upgrade to organised community pharmacies by converting their existing outlets into Medicine Shoppes and entrepreneurs interested in venturing into organised drugs retailing.

CDC would bring to the table its experience in pharmaceuticals and insurance as it has invested both these sectors, he said.

Gandhi is aiming at 50 Medicine Shoppe pharmacy outlets in the country by March 2001. On the anvil are 'preferred provider' alliances with health insurers waiting to start business in the country following liberalisation of insurance sector.

Medicine Shoppe faces stiff competition from the likes of the Apollo Group, and the RPG group's brand Health N Glo. Both groups have the backing of financially-strong groups and are gearing up for a major push in the business. Apollo also has the distinction of being the first corporate to venture into organised pharmacies.

Melrose has been promoted by Dolphin Laboratories, a pharmaceutical company that holds 64 per cent in it. The company does not intend to invite any more investors after CDC.