MerryMart [MM] buys Quezon province’s largest pharmacy chain

The signed agreement for MerryMart [MM 4.14 4.02%] to acquire 67% of Carlos SuperDrug did not mention the price or any other terms and conditions of the deal. Representatives for MM said that the acquisition of Carlos SuperDrug was meant to “enhance MERRYMART’s range of pharmacy offerings”, “strengthen its supply chain”, and add “Pharmacy DNA to the MERRYMART ecosystem”.

Carlos SuperDrug has 27 locations that will continue to be operated by the Carlos SuperDrug team, “in tandem with the MerryMart team”. MM also said that it is interested in additional mergers and acquisitions for its grocery business and pharmacy business. MM is owned by Injap Sia, co-owner of DoubleDragon [DD 11.80 2.32%] and DDMP REIT [DDMPR 2.00 0.50%]. 

MB BOTTOM-LINE

MM is just one component of Injap’s 2030 vision, which seems founded in making MM (and other Injap interests) a central part of our everyday lives.

Pharmacies bring a great deal of foot traffic on a daily basis, both from walk-bys (“Need some biogesic to make it through this day”) and repeat customers (“Filling my prescription of Crestor for the 30th time”), but they’re specialized. It’s easier for a pharmacy to grow its product offering to look more like a convenience store than it is for a convenience store to just casually add some pharma capabilities.

Pharmacies require domain knowledge, special employees, and demand a higher degree of cold chain and logistics care than do convenience stores, but their products are high-value, and their customers are (similarly) high-value. Someone who can afford to fill their Crestor prescription for the 30th time might also be interested in some high-margin snacks, groceries, or other conveniences. Not to mention the growing popularity of prescription deliveries; MM might be able to build a delivery business with a reliable schedule of repeated prescription orders as the foundation.

I want to see how much MM paid, and I want to know MM’s plans for the SuperDrug name. I’m also curious to see how aggressive MM will be in incorporating this “pharmacy DNA” into MM branches. Like a lot of Injap moves, there are lots of interesting opportunities, but we’ll have to see where they take this.

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