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BLUE Sky Private Equity is set to enter the $2.3 billion hospital pharmacy market, after purchasing a major stake in HPS.
The investment arm of Blue Sky Alternative Investments (ASX:BLA) teamed up with Partners Group to acquire the pharmacy services provider for an undisclosed amount.
HPS has an annual turnover of more than $130 million, backed by long-term contracts with Healthscope, Calvary and St John of God.
Blue Sky Private Equity investment director Nick Dignam says HPS' strong market share makes it a perfect fit in the company's portfolio.
"Expenditure on healthcare per capita is increasing, which is providing growth for hospital pharmacies' key customers, hospitals and oncology facilities," Dignam says.
"While we are sector agnostic, our investments tend to focus around the essentials, the things that people need, rather than want.
"HPS' management team also has a deep industry experience. They have built an excellent business relying on long-term contracts and a high rate of customer retention."
Blue Sky Private Equity and Partners Group plan to increase the network of pharmacies within hospitals, and expand into adjacent markets.
As the leading provider of outsourced hospital and oncology pharmacy services in Australia, HPS is running trials for the production of compounded chemotherapy drugs.
The trials at two separate facilities are awaiting Therapeutic Goods Administration (TGA) approval.
HPS CEO Tony Wyatt says the hospital pharmacy market alone is growing rapidly.
"The growth in hospital pharmacy services is driven by an ageing and growing population, higher incidence rates of chronic diseases including cancer and the increasing ability to medically treat patients," Wyatt says.
"The current trend towards state governments partnering with the private sector to operate and service public hospitals is also leading to an increased trend towards outsourcing hospital pharmacy services.
"We provide a high level of support to the pharmacy network, enabling them to provide a better service, which ultimately means better care to clients, patients and the wider community."
The $15.3 billion pharmacy market is split between retail and hospital pharmacies in Australia.
Have you ever thought of taking a chance at alternative investments? That's what Mark Sowerby, founder of Blue Sky Alternative Investments (ASX:BLA), does every day.
As founder and managing director of Australia's first diversified alternatives asset manager, Sowerby is well versed in investment opportunities beyond traditional markets.Sowerby, who has grown Blue Sky's assets under management to $1.35 billion in the past nine years, knows what it takes to test his comfort zone. He has just returned from a personal journey to the UK where he swam the English Channel.
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