CVC in Advanced Talks to Buy Stake in Drugstore Chain Super-Pharm

Luxembourg-based private equity firm CVC Capital Partners is in advanced negotiations to buy a 40% stake in Israel-based drugstore chain Super-Pharm for a company value of $540 million, said people familiar with the matter who spoke on conditions of anonymity.

 With over $64.5 billion in assets, CVC is the largest private equity fund in Europe. In April, CVC completed the acquisition of one of Poland's biggest convenience store chains, Zabka Polska, for $1.79 billion (€1.5 billion).

With around 4,700 stores in Europe, CVC’s ownership of Zabaka Polska may prove beneficial to Super-Pharms global expansion plans if

the deal is completed. The company is seeing slow progress in the Chinese market, and local competition is eroding the retailer’s profit margins in Israel.

In another Israel-linked deal, CVC agreed to buy assets from troubled Israel-headquartered generic drugmaker Teva Pharmaceutical Industries Ltd.'s for $703 million, in an acquisition announced last week.

Israel-based banks Bank Leumi and Israel Discount will sell a combined 25% of the drugstore chain according to a $487 million valuation to Super-Pharm’s chairman Leon Koffler, these people said. Mr. Koffler will then sell 40% of the shares to CVC, they said.

Headquartered in Herzliya, around 9 miles north of Tel Aviv, Super-Pharm operates drugstores in Israel, Poland and China. The company's successful expansion in Poland, where it operates 68 branches, is impeded by an April 2017 Polish legislation limiting the number of public pharmacies a single entity can open in the country. The legislation is expected to impact the Israeli retailer's future sales, as Super-Pharm already leased space for additional 15-20 drugstores in the country.