For an undisclosed sum, mPharma, a Ghanaian health startup, has acquired a majority interest in Uganda’s Vine Pharmacy, marking the company’s debut into its latest African market.
The deal with Vine Pharmacy, according to mPharma, involves the acquisition of a 55 percent stake previously held by the Abraaj Group, a private equity firm that went bankrupt after investors, including the Bill and Melinda Gates Foundation, raised concerns about the management of its $1 billion healthcare fund. Abraaj purchased Vine Pharmacy in 2013, when it was Uganda’s largest pharmacy business.
“Vine used to be the biggest pharmacy chain in Uganda. At its peak, it had about 36 stores spread across the country. But with Abraaj as its largest shareholder, the business had to resize once there wasn’t any more capital available for growth. We are buying out the stake that Abraaj held,” mPharma co-founder and CEO Gregory Rockson said.
The Vine Pharmacy acquisition comes two years after mPharma purchased Kenya’s Haltons Pharmacy for $5 million, marking the company’s first push into the East African market.
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Rockson stated that he hopes to restore Vine Pharmacy to its former glory, when it was Uganda’s largest retail pharmacy business. When Abraaj took over, Vine Pharmacy had 20 branches across Uganda and set out on an aggressive growth plan that included doubling its branches by 2018 — a feat it achieved until the PE collapsed, resulting in the closure of numerous shops. Abraaj increased the pharmacy’s wholesale business, supplying government organizations and health institutions, and personalizing patient care through home visits.
A Look At What mPharma Does
MPharma tracks which drugs are available at any given time and where, giving patients reliable access to medicines and — with better inventory management — more competitive pricing. Using its proprietary Vendor Management Inventory (VMI) system and QualityRx franchise model, which replicates similar features seen with co-operative retailers in the US and Europe, employing common branding, inventory systems and collective purchasing, mPharma is attempting to shake the market up a bit. Both proprietary rights are already being used in over 250 pharmacies in Ghana, Nigeria, Kenya, Zambia and Zimbabwe.
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mPharma entered Ethiopia earlier this year through its subsidiary, Haltons Limited, after striking a franchise deal with Belayab Pharmaceuticals. Belayab Group, an Ethiopian franchisee of firms such as Pizza Hut and Kia Motors, owns the Ethiopian pharmaceutical company.
Last month, the startup also launched operations in Gabon after the West African country hired the firm to create drug supply chain infrastructure, expanding the startup’s reach in the continent’s pharmaceutical systems and distribution networks. Other markets in which the tech startup operates include Ghana, Nigeria, Kenya, Zambia, Malawi, and Rwanda.
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In November 2020, the company teamed with Mt. Meru Group, a Rwandan gas station operator, to open pharmacy branches within its stores.
“Within less than a year, we’ve been able to rapidly build the largest retail platform in the country. Today, Rwanda is a very promising market for us,” he said.
mPharma Uganda Vine Pharmacy mPharma Uganda Vine Pharmacy
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write