EVCOR ADVISOR – APRIL 2020 – Pharmacy Edition

Dear front-line Pharmacy Owners,

Re: your contributions to society and the value of your pharmacy

In today’s times of societal upheaval, we sit in a unique position at the intersection of health care and finance as both as ex-pharmacy owners and M&A professionals. In our roles, each day, we speak with pharmacy owners from coast to coast in Canada.

We hear your stories of the deluge of telephone COVID-19 related inquiries and frightened patients you console. As frontline pharmacy workers across this country, you continue to perform your duties tirelessly in the face of real danger. While we hear stories of genuinely heroic physicians and nurses becoming infected as they treat a growing wave of patients in hospitals and triage facilities, there is not enough recognition of the contributions you make! So we formally thank you on behalf of all Canadians.

But just as your patients are afraid of the health ramifications of this outbreak, we hear the fear in your voices as well. What does this mean for the value of my pharmacy and all that I have invested in it? As you can attest as you drive to your pharmacy, and peer out at your business owner brethren, you are one of the few businesses open. We, in the Canadian retail pharmacy industry, will survive and are of prime interest to the next generation of pharmacy owners. This pandemic has reminded acquirers of all shades, that pharmacy is an enterprise in which they want to invest.

We have seen early indicators that the “multiples” of earnings paid for pharmacies are intact during these times. Although there is the expectation of some ebbs and flows in revenues over the coming months, those will all be considered one-time in nature. As before the pandemic, from a valuation perspective, your historic earnings will be the principal indicator of future earnings.

In summary

Thank you for all that you do and your contributions during this trying time.
Your business is still valuable and remains a coveted investment.

If you wish to discuss further, please send an email to arrange a mutually convenient time.

Sincerely,

Max Beairsto, B.Sc.Pharm., MBA, CVA
Enterprise Valuators Corporation
max@evcor.com