Dis-Chem seeks to buy Baby City from founding shareholders for R430 million

Pharmacy group Dis-Chem has entered into a conditional arrangement to buy Baby City from its founder shareholders, the Aronoff family, for R430 million.

In an update to shareholders on Friday, Dis-Chem said that Michel Aronoff would continue to serve as managing director of Baby City and current  staff would be retained if the deal is given the greenlight by competition authorities and certain other conditions relating to employment contracts and leases are fulfilled. 

"The acquisition is a great cultural fit and has been a target of ours for many years. The brands and businesses were built with similar philosophies, ensuring management team alignment as we take steps to unlock the value we see in the Baby City brand," said Ivan Saltzman, Dis-Chem’s CEO, in a statement. 

Dis-Chem said if the transaction is approved, it would include Dis-Chem branded clinics at Baby City stores, offering ante and post-natal clinic services aimed at babies and toddlers. It has also identified another 30 possible sites for new stores. 

The pharmacy chain said that Baby City had "continued to trade well relative to the Covid-19 lockdown environment," which demonstrated "both the resilient nature of the industry and the inherent brand equity of the retailer".