mPharma acquires majority stake in Nigeria's HealthPlus

Johnstone Kpilaakaa -

mPharma has acquired the majority stake in HealthPlus, the leading pharmacy chain in Nigeria. mPharma announced today (September 15, 2022) that it signed an agreement with HealthPlus' former investor, Alta Semper to enable the acquisition.

This is not the healthtech startup's first majority stake acquisition, mPharma acquired a 55% stake in Uganda’s Vine Pharmacy in October 2021, two years after it bought Kenya’s Haltons Pharmacy for $5 million—that marked mPharma’s launch into East Africa.

Gregory Rockson, the Chief Executive Officer and co-founder of mPharma stated that the acquisition of the HealthPlus Pharmacy chain by mPharma complements mPharma's deep commitment to increasing patient access to affordable and quality healthcare in Nigeria.

"mPharma is deepening its long-standing commitment to Africa by reimagining primary healthcare in some of the most vulnerable communities on the continent. We continue to transform community pharmacies into primary care centres to provide affordable and accessible healthcare to all patients so they can live not just longer but healthier lives. We are optimistic about the future of healthcare for Nigerians through the acquisition of HealthPlus," Rockson said in a statement seen by Benjamindada.com.

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Gregory Rockson, mPharma's co-founder was one of the four Africans selected for the Bloomberg New Economy Catalyst class of 2022.

In January 2022, mPharma secured $35 million in a Series D round to embark on pan-African expansion and to also launch an e-commerce platform—Mutti Online Pharmacy—that allows its members to easily shop for pharmaceutical products. By combining HealthPlus pharmacies with mPharma's growing portfolio of partner mutti pharmacies and GoodHealth shops (PPMVs), mPharma’s network will grow from 224 to over 320 health facilities in Nigeria and will provide care to more than 100,000 Nigerians each month.

While mPharma plans to continue to keep and strengthen HealthPlus as Nigeria’s leading pharmacy brand in Nigeria, the acquisition will also provide expansion opportunities for mPharma within Nigeria and a platform to expand mPharma’s mutti pharmacy retail footprint across the continent through its fast-growing QualityRx program.

"We need to work hard to rebuild the trust we lost with our [HealthPlus] customers," Rockson said in a promotional video. 

Powered by mPharma’s proprietary Bloom software, HealthPlus will provide patients access to affordable primary care services within its pharmacies, in addition to affordable and quality medications it currently retails across 12 states in Nigeria. The HealthPlus pharmacy chain will also launch mutti®, mPharma’s health membership program, which will provide both existing and new customers with discounts, interest-free “heal-now-pay-later” plans, free health screenings, and other primary care services

Related Article: Healthtech startups changing the narrative about Africa’s health system

"We have a strong conviction in mPharma’s strategy of revolutionizing primary care across Africa and believe mPharma is the ideal steward for HealthPlus’s next chapter of growth. We believe mPharma’s vision is consistent with that of HealthPlus’s shareholders and employees, and we are enthusiastic to support the business through a relationship with mPharma going forward," Afsane Jetha, Co-founder and CEO at Alta Semper Capital said.

HealthPlus crisis with its investor, Alta Semper Capital

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Founded in 1999 by Bukky George, HealthPlus had over 90 retail outlets with about 850 employees including more than 150 pharmacists. The company claimed to be present across 11 of Nigeria's 36 states as of 2020. 

In March 2018, Alta Semper Capital agreed to invest $18 million in HealthPlus, to be disbursed in two tranches. The firm was to exit after five years (2023) while Bukky George, HealthPlus founder and CEO, would give Alta Semper Capital a controlling stake for them to realise their investment.

The sum of $10 million was paid as the first tranche of the investment with the remainder due 12 months after the release of the first. However, the second disbursement reportedly did not come after 12 months as agreed.

Two years after receiving an investment from Alta Semper Capital, HealthPlus faced an internal crisis with its investors leading to the termination of Bukky George's appointment—who founded the company—as CEO by the board. However, HealthPlus debunk George's sack stating that the press release was not authorised by the Company or anybody acting on its behalf.

Techpoint reported that despite the investment, the company had a slow growth due to the inability of the investors to fulfilling their obligations—Alta Semper denied these allegations.

A court petition by George on the issue reads: "the deliberate delay and withholding of funds [by Alta Sempa]; meddling with management, interference with the functions of key employees; abuse of corporate governance processes and now the attempt to remove her as CEO." Despite the court directive, the private equity firm made attempts to seize HealthPlus' bank accounts and offices.

In March 2021, Justice Oluremi Oguntoyinbo sitting at a Federal High Court in Lagos ruled that the court will proceed with contempt proceedings against Alter-Semper and its bankers in the dispute between Bukola George, the founder and former Chief Executive Officer of HealthPlus and some directors of HealthPlus.

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Contempt of court often referred to simply as "contempt" is the offence of being disobedient to, or disrespectful toward a court of law and its officers in the form of behaviour that opposes or defies the authority, justice, and dignity of the court. 
"We have to work hard to rebuild the trust we lost with our [HealthPlus] customers," Rockson said.

Editor's Note: mPharma is yet to respond to our questions on the current management of HealthPlus and on how they intend to facilitate Alta Semper Capital's exit.