Malaysia: PE player Creador injects $24.53m in investee RedCap Pharmacy for expansion

Creador CEO Brahmal Vasudevan and RedCap CEO Ian Cruddas at the launch of RedCap.

Private equity firm Creador has invested MYR100 million ($24.53 million) in RedCap Pharmacy, which it acquired in April last year.

The retail pharmacy chain, formerly D’Apotic Pharmacy, has undergone some management changes, rebranded itself and is now aiming to become a leading national player.

The funding will cover RedCap’s first phase of growth by providing capital for expansion plans over the next 18 to 24 months.

The South and Southeast Asia-focused PE firm will consider investing more capital in the chain for expansion, within the period, should the need arise.

Creador founder and chief executive Brahmal Vasudevan said, the firm has always been keen on the healthcare sector but recognised that there were few “strong players” to pick from for investment.

“We have not done anything in healthcare largely due to the scarcity of opportunities to invest,” he said of the Malaysian market.

Creador’s acquisition of D’Apotic was completed in May 2015, with the PE firm buying out the pharmacy chain from its three pharmacist founders.

The deal was done under Creador’s Fund II, and Vasudevan said, future funding into the business could either be sourced from Fund II or its current Fund III.

Post-acquisition, Creador brought in a new chief executive officer and managing director, Ian Cruddas, to lead the business, and put in place a new management. The business is now rebranded as RedCap.

Vasudevan said, Creador owns the majority of the business, with a portion of shareholding set aside for the management.

An executive with RedCap noted that one of the founding pharmacists has also rejoined the current management team.

Partnering the management team, Creador is looking at building the retail pharmacy business organically, with a six to ten-year investment horizon.

There are eight RedCap stores opened in the Klang Valley since November last year, and the company intends to expand its store network around Malaysia to at least 300 stores over the next three years, with the initial capital of MYR100 million.

The target for end-2016 is to have 70 pharmacies to be operating throughout Malaysia. The chain now has 25 stores.

The company will also rebrand its existing D’Apotic stores, located in the southern state of Johor, to RedCap.

Vasudevan saw great potential in the retail pharmacy market in Malaysia, given its low saturation.

“There are 2,500 pharmacies across Malaysia at present and we believe that the market can take 4,000 to 5,000 pharmacies,” he said, adding that RedCap’s strategy is to be a community pharmacy chain, with great accessibility for consumers.

He also pointed out that as Malaysians take home higher disposable income, their healthcare needs will increase in tandem.

Cruddas commented: “The retail pharmacy sector remains fragmented, with almost 70 per cent of stores operating as stand-alone outfits, and few have qualified pharmacists present throughout all trading hours. There is tremendous opportunity for RedCap, a fully professional Malaysian pharmacy chain.”

Another selling point about RedCap, he added, was that 30 to 40 per cent of the stores will be dedicated to consultation.

Also read:

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Exclusive: Creador raises $250m for first close of Fund III, to seal two Indonesian deals in Oct

Creador raises $500m in Fund III, looking towards Sri Lanka and PH too

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.