Blue Sky Private Equity backs leading pharmacy services provider
In its largest deal to date, Blue Sky Private Equity has acquired a majority share in HPS, for an undisclosed amount, to take a stake in the growing $2.3 billion hospital pharmacy market. Blue Sky partnered with Partners Group for the investment.
HPS and its network of pharmacies is Australia’s leading outsourced hospital and oncology pharmacy services business, with annual turnover in excess of $130 million and 430 staff across its network, backed by long-term contracts with blue chip customers such as Healthscope, Calvary and St John of God.
Blue Sky Private Equity and Partners Group are partnering with HPS to support their significant growth plan and increase the footprint of its network of pharmacies within hospitals. HPS also plans to expand into adjacent markets. The company is currently running trials for the production of compounded chemotherapy drugs in two facilities awaiting Therapeutic Goods Administration (TGA) approval.
In 1975, HPS was founded by a sole pharmacist servicing a small 28-bed nursing home in South Australia. HPS and its network of pharmacies has grown to become a leader in the provision of pharmaceutical products and services in healthcare and correctional facilities, such as private and public hospitals, cancer and IVF clinics and prisons. The company also provides equipment, IT and labour to pharmacies to assist with their service delivery.
In Australia, the $15.3 billion pharmacy market is split between retail and hospital pharmacies.
HPS CEO Tony Wyatt said the hospital pharmacy market alone, in which HPS and its network of pharmacies operate, is estimated at $2.3 billion per annum and growing rapidly.
“The growth in hospital pharmacy services is driven by an ageing and growing population, higher incidence rates of chronic diseases including cancer and the increasing ability to medically treat patients,” Mr Wyatt said.
“The current trend towards state governments partnering with the private sector to operate and service public hospitals is also leading to an increased trend towards outsourcing hospital pharmacy services.
“We provide a high level of support to the pharmacy network, enabling them to provide a better service, which ultimately means better care to clients, patients and the wider community.
Blue Sky Private Equity investment director Nick Dignam said the company was attracted to HPS’ leading position in an essential market.
“Expenditure on healthcare per capita is increasing, which is providing growth for hospital pharmacies’ key customers, hospitals and oncology facilities,” Mr Dignam said.
“While we are sector agnostic, our investments tend to focus around the essentials, the things that people need, rather than want. HPS fits perfectly into our portfolio.
“HPS’ management team also has deep industry experience. They have built an excellent business relying on long-term contracts and a high rate of customer retention.”
Blue Sky Private Equity was established in 2006 as a provider of expansion capital into rapidly growing small and medium-sized enterprises.
Blue Sky Private Equity is a division of Blue Sky Alternative Investments (ASX: BLA).
