Johannesburg - One of SA’s largest pharmacy chains, family-owned Dis-Chem, on Friday morning listed on the JSE as it seeks to boost its growth plans.
The company, which announced its intentions earlier this month, intended raising R5 billion on listing through selling a 27.5 percent stake, at between R16.25 and R20.25, valuing the company at as much as R20 billion.
Reuters reports that, upon listing, its shares opened at R23.26, valuing it in its target range. However, Dis-Chem's share price subsequently stumbled slightly to R21.50.
Dis-Chem has become the 14th company to list on the bourse this year.
It was founded by chief executive Ivan Saltzman and his wife Lynette in 1978.
Dis-Chem, 66.9 percent owned by the Saltzman Family Trust, turned over R15.5 billion in the year to February from its about 100 stores, with earnings before interest, tax, depreciation and amortisation of R1.1 billion.
Its other shareholders include key management, with 23.4 percent, while the balance is held by an unnamed financial investor.
Cash raised by the listing will be used to buy back shares from existing shareholders, pay down debt and general corporate purposes.
Dis-Chem said earlier this week it had sold a 27.5 percent stake to investors at R18.50 per share, valuing the company at almost R16 billion.
The company has said its growth plans include doubling its store footprint in the next 5 to 8 years by pursuing store roll-out opportunities and converting independent pharmacies to the Dis-Chem brand.
Dis-Chem has more than doubled its store base since 2010 and tripled since 2008.
Donna Nemer, Director of Capital Markets at the JSE, says the exchange is excited to welcome Dis-Chem Pharmacies. “We are very pleased to welcome this established pharmacy and health company onto the Main Board of the JSE and hope that this listing helps Dis-Chem to further propel it on its growth journey. The Food and Drug Retailers sector remained resilient this year despite strong economic headwinds.”
“Listing will allow us to advance and improve our strategy, and at the same time ensure that we can continue growing market share across our product offerings, as well as building on the tremendous brand positioning that has been established over the last 38 years,” says Ivan Saltzman.
Saltzman says Dis-Chem has more than doubled its store base since 2010 and tripled it since 2008. Dis-Chem plans to open a further eight stores during the six months to February 2017 and at least 18 stores during the following financial year.
Dis-Chem joins 8 companies that are listed in the Food and Drug Retailers sector of the JSE. The Food and Drug Retailers sector has a total market cap of R220.39 billion, which constitutes 2 percent of the overall JSE market cap of R13.6 trillion.
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