Pharmacies

Unfortunately, there’s no simple answer or set timeframe. An asset sale or purchase can require a considerable amount of third-party involvement, such as NHS consent, a funding bank and perhaps a landlord's consent to assign or grant a new lease. 

As such, we typically see that an asset sale or purchase can take in the region of five to seven months (sometimes longer) due to those external factors. 

A share sale or purchase tends not to have quite so many third parties involved and often simply goes at the speed at which all the professional advisers work. There is much to be said for taking your time, so while we have managed to complete certain pharmacy share transactions in as little as six weeks, we would recommend that you allow between three and four months for such a transaction. 

The best place to start is with a pharmacy valuation or brokering agent. They will be able to give you a good idea of what your pharmacy might be worth, talk to you about current market conditions and — if required — contact potential buyers about the opportunity. 

There are a handful of superb specialist agents around the country and we have very close links with all of them. We’re always happy to make recommendations as to who might suit you best and make those introductions for you to ensure that you’re in the best possible hands. We then work closely with your preferred agent throughout the entire transaction to ensure that the process is seamless.

It's worth talking to us at the earliest opportunity. We can help you to identify whether there are any aspects of your business that could be tidied-up in advance to make your pharmacy business as attractive as possible to potential buyers. 

This could involve exploring your property arrangements, checking Companies House registers (if relevant) and other similar matters. While it may sound obvious, checking that the NHS contract is validly held in the correct entity's name can be one of the most important steps to take at the outset, which we can also help you with.

It is, though this can be a lengthy process. You would first need to identify and secure premises to operate the pharmacy from. The seller would then notify that address to the NHS and agree a date for the pharmacy to open. You would then need to fit-out the premises before that date and arrange to be registered with the GPhC. The pharmacy would then open in the name of the seller, though you would typically run the pharmacy under a management agreement (which we can prepare for you). 

As soon as the pharmacy has been trading for a day, you would then apply for NHS change of ownership consent and at the end of that period, the pharmacy contract would be legally owned by you. 

Typically, this full process can take between 12 and 18 months. This type of transaction requires specialist knowledge and documentation, so we recommend that you contact us to discuss this in more detail if you’re considering it.

An asset purchase broadly involves all the assets that constitute a pharmacy business physically moving from a seller to a buyer. For example, the NHS contract must change ownership, the employees transfer to a new employer, the landlord has a new tenant and so on. 

This means that much external consent is required, which can extend the process. However, from a buyer's perspective, there is less risk involved as the buyer takes over with a 'clean slate' using their own company and ODS code. 

With a share purchase, the buyer simply 'steps into the shoes' of the seller — the actual pharmacy company itself doesn't change. While this means that the transaction can be quicker, the buyer will also inherit the full history of the pharmacy company (including its liabilities) — so these transactions tend to be much more complex.

Sometimes this is dictated by the existing business structure. If a seller is a sole trader, traditional partnership or Limited Liability Partnership (LLP), an asset sale is required as there are no company shares to sell. 

If the pharmacy is owned by a limited company, it may depend on each side's preference and their respective bargaining power. Generally, individuals like to sell shares in a company for tax reasons — but a buyer may not be willing to take on the level of risk associated with a share purchase. 

There are advantages and disadvantages to both structures, so it’s important to take good quality legal and accounting/tax advice before deciding.

For a lot of people, this is a hugely important (and often one-off) event, which can be as significant as moving house. It involves of lot of time, effort and attention. 

We like to clearly explain what will be involved to clients at the outset and highlight the 'pressure points' where the process can become highly demanding — so at least you know what to expect from the beginning. 

Some of our team members have sold their own businesses, so they know precisely what it feels like. We aim to be as supportive as we can be to minimise the stress to you.