Hochdorf sells Pharmalys stake to Pharmalys Invest Holding
With this move, Hochdorf said is taking a step towards financial recovery and increasing its strategic flexibility. The cooperation between the Hochdorf Group and Pharmalys Group will continue, and Pharmalys Invest Holding remains the largest shareholder of the Hochdorf Group.
At the end of 2016, the Hochdorf Group acquired a 51% stake in three companies of the Pharmalys Group in the hope of accelerating the expansion of its baby care business. Around CHF 245m ($247m) was paid until March 2018. However, Hochdorf said, the business model of Pharmalys gave the Hochdorf executive bodies little transparency in their operational implementation and little influence on relevant parts of the value chain. In addition, the financing of the net current assets of Pharmalys proved to be extremely capital-intensive.
After examining various options, the Pharmalys shares have now been sold. The agreement to sell the 51% shares in Pharmalys Laboratories SA, Pharmalys Africa Sarl and Pharmalys Tunisia SA to Pharmalys Invest Holding was signed on December 6, 2019 for around CHF 100m ($101m). The payment will be made in several instalments until September 2020.
Hochdorf Group said the focus on the high-growth baby care division remains unchanged despite the sale of the Pharmalys shares. Pharmalys intends to continue marketing the Swiss baby food produced by Hochdorf. Hochdorf said it will in future increasingly work with the traditional Swiss brand Bimbosan and the Babina brand.
Hochdorf said that in spite of the sale being an important step towards financial recovery, due to currently low sales in the baby care segment and the technical challenges posed by the new spray tower line in Sulgen, a negative result is still expected for the current fiscal year.
