Global firm takes over Goodlife Pharmacy, eyes manufacturing

CFAO Healthcare has fully acquired the Goodlife chain of pharmacies at an undisclosed amount of money, following the green light from the Comesa Competition Authority at the start of June this year.

The pharmaceutical distributor started partial acquisition of the Goodlife Pharmacy - Kenya’s largest private retail pharmacy chain -  in 2022 by buying a 30 per cent stake from LeapFrog Investments, making it the second largest shareholder.

LeapFrog Investments, a private equity firm, which initially invested in Goodlife, a regional beauty and drugstore, in 2016 after buying its entire stock for Sh2.2 billion, will fully exit through this deal.

Given the time valuation and expansion, the stake is likely higher than Sh2.2 billion.

The management maintained that the retail structure of Goodlife, brand name, and identity would not change.

“The value of this deal is in the brand name; we cannot change it,” said CFAO Healthcare Chief Executive Jean Marc Leccia.

The acquisition comes at a time when Kenyans increasingly lack access to health care due to affordability and a rise in the use of counterfeit drugs, as well as smuggling.

Fight counterfeits

Despite the prevailing economic environment, Mr Leccia said, they have faith in Kenya’s economy, and the firm would set up local manufacturing of pharmaceuticals to fight counterfeits.

“We are looking at it and considering a manufacturing opportunity. Kenya and Nigeria are the two unique countries that could be considered for local manufacturing in Africa, apart from Northern Africa,” he said, noting that Kenya has a competitive edge in manufacturing in the region.

“Kenya’s economy has always shown resilience,” said Mr Leccia, adding that the pharmaceutical space is expanding, hence a healthier middle class.

Despite the proliferation of counterfeit drugs, CFAO Healthcare argues that there is still a large market for genuine drugs.

“To fight the fake, we must have an alternative offer that is safe, irrespective of the economy,” said Mr Leccia, noting that every year, more than 700,000 people die from fake medications across sub-Saharan Africa, which is higher than Malaria-related deaths.

With nearly 150 branches in Kenya and Uganda, Goodlife serves more than two million customers annually through in-store services, diagnostics, telemedicine, e-commerce, and home delivery.

Having held a 30 per cent minority stake since 2022, CFAO Healthcare’s full acquisition marks a major step in integrating retail operations into its pharmaceutical value chain from manufacturing to the final patient.

“By acquiring 100 per cent of Goodlife Pharmacy, we are accelerating our transformation into a global healthcare player,” said Mr Leccia.

The announcement comes at a time when Kenya is experiencing rising demand for decentralised healthcare services, driven by a growing middle class, tech-enabled care models, and Universal Health Coverage ambitions.

“The partnership with CFAO Healthcare represents a unique opportunity to expand this mission, bringing even greater impact and value to our customers and communities,” said Goodlife Kenya CEO Justin Melvin.

Goodlife pharmacy targets over 250 outlets, a dream Mr Leccia said would gain momentum with new ownership.

“We intend to grow; there is no magic number. We may not reach 250, probably not this year, as we are now at 150. We will adjust according to opportunities,” he said, adding that the deal has received all necessary regulatory approvals. 

LeapFrog Investments Partner and Head of Global Healthcare Investments Dr Biju Mohandas said, “This transaction marks LeapFrog’s full exit from Goodlife. CFAO Healthcare is the right long-term partner to amplify Goodlife’s impact and drive the next phase of its expansion.”