Pharmacy Management Buy Out With Specialist Healthcare Funding

The Client 

The client is an experienced pharmacist who has been closely involved in the day-to-day 
running of a well-established community pharmacy. The business was owned alongside two 
minority shareholders who were approaching retirement and beginning to plan their exit. 
The pharmacy has a long-standing presence within the local community, operating from a 
medical practice and benefiting from a consistent trading history. As a result, the business 
holds strong “going concern” value and plays an important role in local healthcare provision.

 

The Challenge 

The transaction required thoughtful planning and careful structuring to ensure all parties’ 
objectives were met. 
Firstly, the client was looking to acquire full ownership of the business through a management 
buy-out. This involved restructuring the group and introducing a new holding company to 
purchase 100% of the trading entity’s shares. 
Secondly, the pharmacy operates from leasehold premises, with approximately 20 years 
remaining on the lease. While this is common within the sector, it meant securing funding based 
primarily on the strength of the business and its goodwill rather than property security. 
In addition, the timing of the transaction was important. The sellers were working towards a 
completion ahead of the end of the tax year to support their wider tax planning, which required 
the funding process to progress smoothly and without unnecessary delay. 
Finally, the funding structure needed to strike the right balance between debt and existing 
equity. The client’s capital was retained within the business via a Director’s Loan, supported by 
a Letter of Postponement, allowing the lender’s requirements to be met while maintaining the 
client’s full control.

 

The Solution 

 

Working closely with the client, we developed a tailored funding proposal that reflected both the 
strength of the pharmacy and the client’s proven experience in managing the business. 
Our approach focused on presenting the pharmacy’s stable financial performance, strong cash.
low, and established position within the local healthcare market. Leveraging specialist 
healthcare lending expertise and long-standing lender relationships, we were able to secure a 
competitive and flexible funding solution. 
The agreed funding package included: 
• Loan Amount: £1.5m (approximately 65% loan-to-value against business value) 
• Pricing: Margin of 1.44% above Base Rate 
• Term & Flexibility: 15-year amortisation with no early repayment charges 
• Fees: A 0.6% arrangement fee, added to the loan to preserve working capital 

 

The Outcome

 

Through close collaboration between all parties — including the lender, valuers, and solicitors 
— a formal offer was secured in line with the required valuation of £2.3m. 
The transaction enabled the minority shareholders to exit the business at fair market value while 
allowing the client to move forward as the sole owner. The new holding company structure also 
provides a more efficient platform for future income planning and growth. 
Importantly, the transaction completed within the required timeframe, supporting the sellers’ 
tax planning objectives and ensuring continuity for both staff and patients.