Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
contact
Lew Zeidner,
ApothecaryRX LLC:
763.392.1781
le*********@*************lc.com
www.apothecaryrxllc.com
ApothecaryRX hunts for independent
pharmacies to buyby Beth Ewen
The founder ofApothecaryRX in Golden Valley is trying to combine the best of twoworlds as he purchases independent pharmacies throughout the country.
?We believe the serviceof the independent model combined with the business side of the chainmodel work well together,? CEO Lew Zeid?ner says. He started two yearsago, has 10 employees in Golden Valley, and has bought 18 stores sofar, with a goal to purchase 10 each year.
?Asyou go to midsize towns across the country you?d see these pharmaciesclosing or selling to big box chains,? he says. ?I have an 86-year-olddad? who would miss the pharmacists he knew after they sold, ?so it?spersonal, too.?
Zeidner says the company standardizes in four areas to make the acquisitions work:
?Human resources and payroll. ?Everyone gets on the same benefit plan.That?s often an upgrade,? becamom-and-pop stores don?t usually haveplans. ?One of the things that?s important is to keep the staff.?
?The information technology platform. ?A lot of independents as they getcloser to retirement are reticent to invest in technology,? he says.
? Purchasing. ?It allows us to get better pricing.?
? Accounting. ?For many independents they don?t track financials on a short-term basis.?
Zeidnersays 90 percent of the sellers come to his company through word ofmouth from others who have sold. He ticks off his criteria foracquiring:
?We?veused a minimum of $5 million in annual sales. It does typicallyindicate that there?s enough connection with that community.
?Second, we look at the people. Will people stay? Becawe?re buying the relationships.
?Three, what?s happening in the community? Is there a decline?
?Finally, the softest one is just style. Is it a good match??
Hesays there are 2,000 independent pharmacies that fit the criteria.Zeidner says many times the pharmacists who are selling are attached totheir businesses, and the company tries to be sensitive to that fact.
?We often say the store has been an extension of the owner?s living room. It?s a very emotional time,? he says.
Zeidnerwas a hospital administrator for years, then became involved with apharmacy management company in hospitals which he sold in 1998. Hehelped to start PrairieStone Pharmacy in 2004, then took theopportunity to exit when it changed hands.
Tofinance the venture, ?We found through contacts a person in OklahomaCity in the oil and gas business, Roy Oliver, who signed guarantees andso on,? Zeidner says. ?In January we did a reverse merger into apublicly traded shell,? also in Oklahoma City. ?Our market cap rightnow is $150 million.?
Hesays he tried to get financing from Minnesota firms but failed. ?Wewould have loved to keep this completely Minnesota-based. I mean, it?slocated here, but our legal services, for example, are in OklahomaCity,? Zeidner says.
