The company specializing in online parapharmacy has entered into a 200 million financing agreement with the family office Alpha Blue Ocean, to support the acquisition of 200 pharmacies.
Michaël Willems, co-founder and CEO of company specializing in online parapharmacy Pharmasimple, had announced the color a few weeks ago: it would need new funds to finance your company’s new strategy, that will reinvent itself around a chain of pharmacies in Belgium while reducing the candles on digital.
The young boss, however, did not specify the amount he intended to raise. This is already known: up to 200 million euros! This financing, pharaonic for a company of this size – and one of the biggest fundraisings this year in Wallonia – will be granted in the form of bonds convertible into shares by the Global Tech Opportunities fund through Alpha Blue Oceana London-based family office.
The latter was recently became a reference shareholder from Pharmasimple, alongside Michaël Willems and his wife Annabelle Thiry, recently participating for a capital increase of 10 million euros. Alpha Blue Ocean, which only funds listed companies, is extremely active in France, where Pharmasimple has become one of the leaders in the online drugstore market. The operation will be carried out over a maximum period of five years., according to a flexible mechanism that will adapt to the company’s financing and growth needs. Pharmasimple will withdraw cash investment by investment at the rate of 0.5 million per tranche, up to a maximum of 400 times.
A dead end model
Founded in 2010, Pharmasimple was one of the pioneers in the online sale of medicines, before focusing in 2013 on food supplements, parapharmacy and cosmetics. But despite a major expansion in France, Michaël Willems believes that this model is currently at an impasse, due to a lack of profitability and development prospects. He wants return to the basic pharmacy by creating a pharmacy network in Belgium.
The first step was to clear the company’s capital, listed on Euronext Growth in Paris since 2017, with the help of Alpha Blue Ocean. Thanks to the 200 million contributed by this same partner, the second phase, that of strategic reorientation, you can start. But why this inversion? “With digital, we focused on France. In Belgium, it was difficult to progress without colossal investments”, argues Michaël Willems. “Online commerce exploded with covid, but people were locked up for two years and we reached saturation. You add to that an ultra-competition: being a redistributor becomes extremely complicated, not to mention that in the pharmacy it is difficult to transmit advice in a structured way on digital. We only make a difference in price and delivery costs. After experiencing very strong growth that almost suffocated us, as we were undercapitalized, we had to rethink our business model. We couldn’t go on like this, fighting for a 5 cent difference without creating real added value”, continues the CEO.
The role of the pandemic
The desire to no longer be undercapitalized also explains the importance of the amounts collected with Alpha Blue Ocean. Very quickly, the digital part will only represent around 20% of the company’s turnover in the coming years. In this segment, Pharmasimple will leave the first places to others.
“After the difficulties of 2010, pharmacies are better than before, the generic market has stabilized, margins have improved.”
The second element that led the head of Pharmasimple to change his tune was the pandemic, which brought the role of the neighborhood pharmacist back into the spotlight. “We could have used them better during the pandemic, we would have saved time,” notes Michaël Willems. “But, in addition, pharmacies remained open during the crisis and also played a social role in the population. In addition, the market has changed. After the difficulties of 2010, pharmacies are better than before, the generics market has stabilized, margins have improved”.
The objective of Pharmasimple, which already has seven pharmacies in Brussels and Flanders, is eventually to create a group of 200 pharmacies, at a rate of around thirty acquisitions a year across Belgium. But Michaël Willems doesn’t want to completely copy what already exists, like Multipharma or LloydsPharma. He wants each pharmacy in the new group to be able to maintain its characteristics. “We don’t want to standardize or federate around an identity, even if there is a global brand called Pharmasimple. We want to create a more humane group. We want to keep the pharmacist with us, he will continue to operate his pharmacy if he so chooses.“, he underlines.
Pharmasimple offers a total purchase from the pharmacy, all at once or gradually, with a slightly better price compared to the market. It will support pharmacists with purchasing groups and come in support to relieve them of some of the administrative work and inventory management. She will also take care of human resources if the pharmacy has several people.
- Pharmasimple, a company specializing in online parapharmacy, has entered into a financing agreement 200 million with the Alpha Blue Ocean family officein the form of convertible bonds.
- This fundraiser, one of the biggest of the year in Wallonia, will be used to support the acquisition of 200 pharmacies.
- The Walloon company has in fact decided to turn around and go back to the drugstore pure and hard, while reducing the digital veil.
- According to the CEO, become profitable in online parapharmacy It became almost mission impossible.