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Lloyds Chemists pays 10m pounds for wholesaler

Robert Cole
Monday 13 June 1994 23:02 BST
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(Photograph omitted)

LLOYDS Chemists, the drugs and healthfood retailer, has spent pounds 10m buying Daniels Pharmaceuticals, a wholesaler, writes Robert Cole.

The purchase will increase turnover by a quarter at Barclay Enterprise, the arm of Lloyds that supplies independent chemists. Daniels had sales last year of pounds 50m and made operating profits of pounds 1.5m.

Lloyds supplies its 900 pharmacies separately. Its independent supply business is much smaller, but the company has recently stressed its ambitions for Barclay.

Daniels is best known as a wholesaler of prescription drugs. Lloyds will inject its existing ethical pharmaceutical wholesaling business into Daniels, and retain the latter's name. Barclay will concentrate on the supply of toiletries.

Daniels also has a pharmaceutical manufacturing operation, which will be merged with Martindale, Lloyds' drug-making subsidiary.

Most of the purchase price is goodwill; Daniels' net assets are pounds 913,000. The cash deal will be funded from existing resources. The vendors are three private individuals.

Peter Lloyd, chief executive, said the move would make little difference to group debt, leaving gearing between 25 and 30 per cent.

Lloyds shares fell 2p yesterday to 305p. In the past year the share price performance has mirrored the FT-SE 100 index. The shares rose from 244p last August to a peak of 379p in January.

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