HealthPlus is arguably one of the leading retail pharmaceutical companies in West Africa. It was founded in 1999 by Mrs. Bukky George and it is made up of approximately 80 retail outlets, making it one of the largest specialty retailers in West Africa.
The pharmaceutical company has been in the news in the past few days as there appears to be a ‘battle’ for the leadership of the company between the founder and investors. Here is what we know so far.
Appointment of Chidi Okoro as Chief Transformation Officer
The appointment of Chidi Okoro as Chief Transformation Officer of HealthPlus seems not to have gone down well with the founder and management of the company.
In the press release announcing the appointment of Okoro, Alta Semper, the private equity firm which controls the majority shareholder of HealthPlus said that his mission “Is to optimize day-to-day management and elevate the business to novel scale and profitability. The founder of the Company Mrs. Bukky George continues to be a director and a shareholder.”
Alta Semper also reinstated its continued commitment to the Company and disclosed its desire to “inject fresh capital to accelerate growth and utilize emerging opportunities in global healthcare.”
Incoming CTO Okoro said: “I would like to recognise HealthPlus’ role in spearheading the evolution of modern pharmacies across Nigeria and scaling retail capabilities in the industry overall. I am incredibly excited to now have the opportunity and the resources to take the platform to the next level, at a time of unrivaled opportunity for the sector. I look forward to working with all stakeholders to achieve even greater things in the future.”
With the appointment of Okoro as per the release from Alta Semper, Mrs. George will no longer be involved in the day to day running of the company.
Rejoinder Accusing Investor of the Hostile takeover of HealthPlus
Not taking things laying low, HealthPlus released a rejoinder accusing Alta Semper of fraudulent attempt to take over its business.
The firm also dismissed the appointment of Chidi Okoro as Chief Transformation Officer and the claim that Olubukunola George, Chief Executive Officer, remains a director and shareholder
Health Plus stated that it entered into a five-year partnership with Alta Semper Capital in 2018 to inject fresh capital to further grow the business.
George, the statement stated, was prepared to give Alta Semper a controlling stake in order to realise their investment.
However, it added, PEF started working on schemes aimed at taking over the business after seeing the vastness of the Nigerian market.
Alta Semper, according to Health Plus, deliberately starved the company of funds, neglected its obligations to the business, appointed Okoro as CTO, and was running the company in utter disregard for George’s wishes.
The Chairman of the Board of Directors was said to have resigned two days ago while another director resigned five weeks ago over the debilitating effect of the impasse on the company.
The Chairman of the Board of Directors was said to have resigned two days ago while another director resigned five weeks ago over the debilitating effect of the impasse on the company.
The statement said George had, in May 2020, instituted a suit at the Federal High Court (FHC/L/CS/609/2020) seeking to stop HealthPlus Africa Holdings Limited (the investment vehicle used by Alta Semper Capital and which they control) and their nominee directors from continuing to run and manage the company with disregard to her interests as a member of the Company.
After being served the court summons, Alta Semper appealed for mediation of the crisis outside court, a process frustrated after three meetings in three months. Semper thereafter filed an arbitration claim in England.
The statement concluded: “George remains the Founder & CEO of the company and is focused on preserving and growing this national treasure.”
Alta Semper stands by the appointment of Chidi Okoro
Alta Semper has responded to the rejoinder stating that the decision to terminate the appointment of George and subsequent appointment of Chidi Okoro as the CTO did not violate any Nigerian law through a process of engagement on which the Board sought to address multiple issues on how the company was being managed.
“Despite a series of significant breaches of the terms of Mrs.George’s engagement as CEO, the Board explored a range of options that would enable her to continue to play an alternate leadership role,” the board said in a statement.
The board stated that an amicable resolution between the company and George was not going to be possible as the multiple issues persisted which required that urgent action was required to avoid adverse impact on the entire business, including customers, employees, suppliers, and other key stakeholders.
“As a result, the majority of the Board of Directors of the Company determined that a change of leadership was required if HealthPlus was to achieve its strategic goals and the former CEO’s appointment was terminated in accordance with its terms,” the board said.
The board stated that George, who continues to serve on the board, performed below their expectation to “key performance targets” which “were never achieved” by the former CEO and made Alta Semper Capital (ASC), owners of the company since 2018 “to provide the business with financial support through growth capital.”
HealthPlus board accused George of attempting “to force ASC to restructure the existing binding contracts governing their relationship – agreements “despite a pressing need for cash in the Company.”
The board, however, said the company’s original vision can still be achieved under new leadership and an enhanced management structure, for the benefit of all stakeholders.
How Alta Semper Capital came into the picture with $18 million investment in HealthPlus in 2018
In 2018, HealthPlus raised $18 million from Alta Semper Capital. The press release announcing the investment stated: “Under the terms of the agreement, Alta Semper is investing US$18 million into HealthPlus, which will enable the company to expand its retail footprint and enhance its competitive position. Alta Semper specifically invests in market-leading businesses in defensive sub-sectors within the consumer and healthcare verticals.”
The release continues: “The investment into HealthPlus will enable the Company to capture the pent-up demand for high-quality yet affordable healthcare and professional beauty supplies by developing regional distribution centres in commercial hubs across Nigeria, rapidly expanding the Company’s footprint across Nigeria as well as developing a wholesale channel and investing in private label and e-commerce.”
Commenting on the investment, Bukky George, Founder & CEO of HealthPlus said, “We believe Alta Semper is the right partner for our next stage of growth. Alta Semper’s focus on the healthcare sector, as well as its ability to invest patient and flexible capital, will allow us to grow strategically across Nigeria and further our mission to provide high quality and affordable healthcare products and services to a market that is large and growing.
“Our vision is to be Africa’s #1 for pharmacy, wellness, and beauty. We believe we have found a partner who can help us achieve this goal over the coming years.”
Commenting on the investment, Afsane Jetha, Managing Partner & CEO of Alta Semper said, “We are very excited about our partnership with HealthPlus, a remarkable example of a homegrown company that has become one of the largest specialty retailers in West Africa.
“We believe HealthPlus is well-positioned to take advantage of the grossly under-penetrated Nigerian pharmacy retail market and meet the growing demands of Nigerian consumers, as well as to expand regionally into neighbouring countries.
“We believe that this is an opportune time to enter the Nigerian retail market and invest in a market-leading player such as HealthPlus, which presents a unique risk-adjusted entry strategy, given its existing size and geographic scope. We are looking forward to working closely with Bukky George and her team to further unlock the Company’s growth potential.”
