As the Co-operative Group moves to reduce its £1.2bn capital deficit and focus on core business lines it has turned to longstanding advisers Allen & Overy (A&O) and Addleshaw Goddard to lead on the £620m sale of its pharmaceutical business to Bestway Group, advised by Hogan Lovells.
Addleshaw corporate finance partner Richard Thomas led the deal for the Co-op, supported by corporate partner Richard Fleetwood and associates Andy Green, Ryan Barber, Dean Cox. The Co-op is a longstanding client of Thomas, who is also a member of Addleshaw’s healthcare group and counts as clients Lloyds Pharmacy and Capita, which he advised on its acquisitions relate to its Medicals Direct Group.
At A&O, banking partner David Lines and pensions partner Dana Burstow led for the Magic Circle firm, which last year advised the Co-op on a capital generation plan in the aftermath of it unveiling a hole of in excess of £1bn, and which saw finance partner Alistair Asher join as Co-op Group’s general counsel.
Tom Brassington, a corporate partner at Hogan Lovells who counts Johnson and Johnson among his clients, advised Bestway.
This latest transaction is due to complete in October 2014.
The deal sees 774 pharmacies transferred to Bestway in a move that will mean the group, run by Asian tycoon Sir Anwar Pervez, will own the third largest chain of pharmacies in the UK and have an annual turnover of around £3.4 billion.
Brassington said: ‘Hogan Lovells has worked with Dawood Pervez and the Bestway team for a number of years and we were extremely happy to assist with this major acquisition for the group. The Co-op Pharmacy’s focus on supporting and servicing the needs of local communities makes it a natural fit with Bestway’s existing portfolio of businesses.’
Richard Pennycook, interim group chief executive of The Co-operative Group, said: ‘The proceeds will enable The Co-operative to reduce debt and invest in our business and is part of the focused delivery of our clear strategic plans and priorities.’