Healthcare Matters

Imperial Holdings is a diversified industrial services and retail group with activities spanning logistics; car rental; tourism; financial services; vehicle distribution and retail. The holding company operates primarily in South Africa, Africa, Europe and Australia; it is listed on the Johannesburg stock exchange (JSE); the group is highly decentralized in its management structure and operating principals.

And today, this company of 40,000 employees announced that it would buy the pharmaceutical and consumer healthcare supply chain services business of RTT Health Sciences, conducted by RTT Group, for R500-million. It’s a huge step into uncharted territory (healthcare) for a company that started out in 1948 in the automotive business, yet, one which makes total sense when you consider the logistics/distribution expertise and entrenched resources that the company can bring to bear in it target market/continent –Africa. The businesses acquired include RTT Medical, RTT Trans Africa, RTT Consumer Health and RTT Essentials, as well as 100% of Fuel Africa Logistics, RTT Kenya and RTT Ghana.

Imperial Holdings CEO Hubert Brody said that the acquisition complemented the logistics business as it provided logistics, supply chain and distribution solutions to the pharmaceutical and fast-moving consumer health industries. “It offers exceptional growth prospects as it strengthens our current exposure to high-growth African economies and provides the Imperial group with exposure to a strongly growing pharmaceutical and healthcare industry.”

RTT Health Sciences has a quality customer base with a robust new business pipeline. Through the acquisition, Imperial has also secured a specialist management team, which strengthens and complements the group’s existing skills set in the logistics industry. The company should be on the short list of US and European healthcare companies seeking reliable distribution solutions in Africa.

RTT Health Sciences specializes in multichannel solutions for delivering essential medicines and consumer health products in South Africa, and other African countries. Although the acquisition is subject to an approval process not unlike US anti-trust review, the deal is expected to be approved  for an obvious set of reasons. The supply chain challenges in Africa –especially “the last mile”—are not going to be solved by disparate government-run healthcare ministries. Here’s a clear example of where private industry can cut through the clutter for all the right reasons. The market opportunity is huge and the need is even bigger. And for you international investors, the deal would be accretive to Imperial’s already strong earnings.

—Tom Finn