Pharmacy S439 - Central Kansas

Besides their efficient delivery of prescriptions and patient care, this successfully managed pharmacy and convenience store has diversified its services to better serve its community. Located in central Kansas this business is an independently owned pharmacy that has been serving the needs of this central Kansas community for more than 100 years. The current owner and pharmacist, has managed the business at its current location for almost 40 years and would like to retire within the next 2 years. Besides the usual computerized system found in most pharmacies, the store offers patient counseling, blood pressure monitoring, medication therapy management and home healthcare supplies. The pharmacy also sells retail products including over the counter medication, a wide array of prescription products, small DME products, gifts and has a photo kiosk. In addition to its traditional pharmacy services the practice prides itself on offering counseling to patients for various conditions, including asthma and diabetes. They are a proud member of the Good Neighbor Pharmacy network and are trained to assist patients with their health-related questions. They have an excellent reputation in the community and with local physicians. Beginning in October 2012 they also became a contracted pharmacy to the local County Medical Center (the "health center") under the 340B Drug Pricing Program which promotes access to affordable medications and quality assurance. Under this program the health center provides inventory to the pharmacy and pays the pharmacy a dispensing fee to fill prescriptions, the result is a reduction in cost of sales to the pharmacy and thus improved gross profits. As a contracted pharmacy they serve the needs of health center patients, which make up 70% of their business, but they also have their own customers making up 30% of their business practice. The pharmacy accepts all major payers, including Medicare Part D plans and Medicaid. The business continues to modernize its equipment and facilities and is therefore able to offer a modern day pharmacy at a historic site. New owners purchasing the pharmacy would ensure that 6 essential jobs in the town are saved and the remaining staff is willing to stay on with a new owner. The sale would include all of the assets, some equipment, supplies and a well-established client list. The real estate, facilities and some equipment are owned by the owner via a separate legal entity and leased to the pharmacy. Preferably these assets would transfer with the business although a lease or lease-to-purchase agreement could be negotiated separately from the sale. Gross revenues have been steady, although the trend in generic prescription use has had an impact in the last few years yet they still ended 2014 with over $1.5M. There are many opportunities for continued growth and they are profitable with profit margins between 3% and 5% of revenue. Annual discretionary cash flow earnings to the new owner, i.e. adjusted EBITDA, is estimated to be more than $250K, sufficient cash flows to a new owner to service any debt financing and still receive an adequate remuneration package. The estimated value range from operations of the practice is between $435K and $650K (excluding receivables, inventory, liabilities and facilities and some leased equipment).

* Adjusted EBITDA = EBIT plus Depreciation and Adjustments (excluding Owners compensation)

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