Retail Pharmacy MPD695

Establishing its footprint in the local community for over 100 years, this independently and privately owned retail pharmacy has been serving the needs of its community for over a 100 years. As the only pharmacy in town, and in a 30-mile radius, this practice is highly respected throughout the community and has developed a strong client base with high client retention of 80%-90%. Services and products offered, besides prescription fulfillment, include; over-the-counter products/drugs, simple compounding, long-term care/Assisted Living consulting, and durable medical equipment. The current owner has been the primary pharmacist on duty for the past 42 years and is looking to retire. Ownership will transfer via a joint partnership, owner-assisted junior partner transition, or an outright sale. Furthermore, the current owner wishes to maintain his current role as consulting pharmacist to the county hospital, at least until the relationship is secured. Operating as an S-Corp, this business employs 4 people; full-time owner/pharmacist (RPh), full-time registered pharmacy technician with 12 years of experience, a full-time and a part-time front-end clerk/employee. Staff are highly experienced and are expected to stay on after the sale. However, both the owner and wife will need to be replaced.

Currently, the practice operates about five and half days per week, with limited hours on Saturday. Services and products provided by this pharmacy other than Rx fulfillment include, automatic refills, unit dose packaging, orthotics, simple compounding, durable medical equipment (DME), long-term care (LTC) and pharmacy consulting through the local hospital, and electronic prescribing of controlled substances (EPCS). As a fully accredited Medicare facility since 2009 they also offer MED D Enrollment Assistance. Through these services, the pharmacy has consistently processed and fulfilled 26,500+ prescriptions per year, ± 15% private pay. Through its contract with the Compliant Pharmacy Alliance (CPA) and its primary wholesaler AmerisourceBergen, this pharmacy is able to compete with larger scale pharmacies utilizing the collectively gained purchasing power. They are contracted to most third parties through their contractual Elevate Provider Network (i.e. Pharmacy Services Administrative Organization - PSAO) which helps ensure local hospice and LTC obligations are also fulfilled. All of these contractual agreements would be transferable to a potential new owner through renewable/turnover clauses included in the existing contract agreements.

This facility is a turn-of-the-century native limestone two story one storefront building with a metal roof occupying a 3,640 square feet corner plot and is fully owned by the corporation and has always been. Ideally the facility will transfer with the sale, however, this would need to be transacted as a separate deal through a lease, lease-to-purchase or outright sale agreement. A small coffee bar is located in the front of the 100 foot building, DME & OTC products appear towards the middle of the store, and the main pharmacy area with Rx fulfillment is located in the back of store. Located at the back of the building is a receiving area, pharmacist office, and bathroom. Currently, the upstairs area of the facility is unoccupied and there is a basement which is used strictly for storage. Operating with an up-to-date pharmacy software system they provide services beyond simple Rx services needed by clients including; EPCS, Auto-fill, IVR, Texting, etc. Notable equipment includes; 6 smart terminals connected to the central-in-house Windows server with a cloud back up function, Rx IVR System, Eyecon Rx Fill System, Nextech equipment, a Photo Kiosk, and 3 shared printers. The sale of this business would include all of the assets, equipment, supplies, and a well-established client list.

With sales consistently $1.6M+ and having achieved a high of $1.85M in FY2016, the store has experienced slightly declining sales, mostly due to the industry factors such as an increase in length of prescriptions (90 day scripts v. 30 day scripts) thus leading to a drop off in Rx prescription numbers, inflation, DIR fees, and the rise in Medicare Part D. Gross profit margins are expected to be ~22% of sales and net profit margins are estimated to be around industry averages of 2%+ of annual sales. Annual discretionary cash flow earnings for a potential new owner (i.e. Adjusted EBITDA), are estimated to be 12%+ of sales or $175K+, sufficient for a new outright owner to service debt financing and still receive a generous remuneration package. The estimated value range of this practice from operations is between $240K and $310K - excluding cash, receivables/payables, Rx inventory, liabilities and facilities. For illustration purposes, based on weighted averages of our analysis, the estimated value of the operational aspect of the Company as of September 30, 2021 is around $280K. (Note: this is only for guidance it is not RedTire's suggested price point)