In a significant move to bolster its presence in Jamaica’s healthcare sector, Fontana Limited has officially agreed to purchase the Monarch pharmacy chain from Gerk Limited, a company associated with the Loshusan family.
Announced on Monday, Fontana, a publicly traded pharmacy group, currently operates seven locations across six parishes. The acquisition process is set to commence with comprehensive due diligence, aiming for completion within the third quarter of the fiscal year (January to March). Full integration of Monarch into Fontana’s existing operations is projected to be finalized by the end of 2025.
Anne Chang, CEO of Fontana Limited, expressed enthusiasm about the acquisition: “Welcoming Monarch Pharmacies into our network is a pivotal advancement in our growth strategy. This expansion not only enhances our service capabilities but also reinforces our commitment to delivering top-tier healthcare solutions across Jamaica. The addition of Monarch’s locations will enable us to reach more communities and solidify Fontana’s reputation as a leading pharmacy provider in the region.”
When approached by the Jamaica Observer regarding the financial specifics of the deal, Chang indicated that details are still under wraps as the acquisition is in its preliminary phase. As of the end of September, Fontana reported a cash reserve of $1.19 billion and has secured external debt financing exclusively through The Bank of Nova Scotia Jamaica Limited (BNSJ).
Fontana’s acquisition history includes the purchase of Azmart Limited, a haberdashery business, in January 2013, and subsequently integrating it into their portfolio through Fontana Kingston Limited. This strategic expansion continued with Fontana Limited acquiring First Venture Investments Limited’s subsidiary, further strengthening their market position before going public on the Jamaica Stock Exchange in 2018.
Addressing concerns about the integration of Monarch’s employees and locations, Chang stated, “Our priority is to maintain the strong culture and operational standards that have defined Fontana for over five decades. We aim to retain as many Monarch employees as possible and ensure a seamless transition that respects the legacy of Monarch Pharmacies.”
Monarch currently operates four locations, including three in Kingston and one in Portmore, strategically situated near existing Fontana stores. This proximity is expected to facilitate smooth integration and operational synergies.
Looking ahead, Chang highlighted ongoing growth initiatives: “We are continuously seeking new opportunities to expand our footprint. Our corporate team is focused on scaling our operations and optimizing shared services across more locations. Exciting developments are on the horizon, and we encourage stakeholders to stay engaged with our progress.”
Financially, Fontana demonstrated robust growth with an 11% increase in revenue for the June 2024 fiscal year, reaching $8.13 billion. This growth was partly driven by the recent opening of a new Portmore location in November 2023. However, operating profits saw a slight decline due to the additional costs associated with the new store.
Despite a 10% reduction in net profit, Chang remains optimistic about future prospects, citing strategic investments and the ongoing acquisition as key drivers for sustained growth. Fontana’s asset base has grown by 10% to $5.68 billion, reflecting the company’s expanding market presence.
Bruce Loshusan, representing Gerk Limited, commented on the sale: “After 35 years, our family is shifting focus to other ventures. We are confident that Fontana will uphold the high standards Monarch Pharmacies has established over the years.”
This acquisition marks Fontana’s latest expansion in the Caribbean, following the recent acquisition of Massy Pharmacies in Trinidad and Tobago. Fontana’s strategic moves position it as a dominant player in the region’s pharmacy and healthcare market.
Fontana Limited is set to present its second-quarter financial report on February 14, and shareholders will have the opportunity to engage with the company’s leadership during the annual general meeting scheduled for March 7 in Montego Bay. Key executives, including Chang, will seek re-election, underscoring the company’s commitment to sustained leadership and growth.
