Chain drugstore mergers and acquisitions, why gradually

The increase in industry concentration is the Ministry of Commerce's plan for the chain pharmacy industry. In order to increase concentration, the fastest way should be expansion (mergers and acquisitions) expansion rather than endogenous (self-opening) expansion. However, in comparison with last year's vigorous mergers and acquisitions, the merger and acquisition expansion of the chain did not seem to be so lively in the first half of this year. The author believes that this is due to the following reasons:

1, M & A capital is not active enough The current mergers and acquisitions are just mergers and acquisitions between chain pharmacies. Although the first pass is adopted by the whole heart, there is still a series of work to be done in the listing. There is not enough capital in the industry, and the mere mergers and acquisitions based on the chain pharmacy industry will not be comparable. Great action and scale. It needs to be involved in industrial capital, commercial capital, VC, PE and other funds before it can form a merger feast.

It needs to be reminded that mergers and acquisitions between chains, if there is insufficient financing, will take up the supplier’s payment. This is a trick that can not be stinky. The goods, in turn, have catastrophic consequences.

2. M&A value assessment and risk prediction mechanism are not perfect The fixed assets of chain pharmacies are not large, intangible assets are also difficult to assess, houses are rented, products are industrial and commercial, their own assets are not large, profitability The assessment requires very professional and scientific people to carry out scientific and professional assessments. At present, there are extremely scarce talents in this area. Some due diligences are just for financial personnel to review and analyze the financial statements. The authenticity of financial statements is also more difficult to verify.

The author hereby appeals that the chain pharmacy consulting companies in the industry create a set of due diligence scientific indicator systems and scientific assessment methods, so that the results of due diligence are scientific and accurate, allowing buyers and sellers to feel that they do not suffer from each other, and think that mergers and acquisitions are a win-win situation. game.

3. There is a large gap between the buyers and sellers' needs Because there is no scientific due diligence, the seller always overestimates their own value, wants to sell a good price, and obtains a higher price-earnings ratio and brand premium. And the buyer always wants to keep the price down and lower the total cost of purchase. It is reported that there was a merger and acquisition incident in North China because of the large gap between the buyers and sellers.

There is also the issue of resettlement of the original management team of the acquired party involved in mergers and acquisitions. If the original team is disbanded and involves a series of problems, the merged party often disagrees that the personnel reduction will be greater, but if there is a problem with the original team, there will be no major operation. Consolidation after mergers and acquisitions is unfavorable, and the resistance to management changes after mergers and acquisitions will be great.

There is also the regional leading chain is often a private rising star, the family's business and industry will not be easily sold, but the chain that is willing to sell, is the business and site selection are both poor companies, so that the demand and supply demand does not match The problem.

4.1+1+1≥2 It is difficult to achieve the current M&A. Due to various reasons, such as no news reports, or indeed no better performance, or in the period of integration, or worse than before, there has been no media coverage. The news that the post-merger sales and profits have soared. On the contrary, it has been heard that some chained branches and offices are closed or have difficulties in operation and are not profitable, making the capital market more cautious about the chain's mergers and acquisitions. In fact, mergers and acquisitions cannot output culture, output talents, output management, and finally export goods. It is indeed difficult to achieve an effect of 1+1≥2.

5. Mergers and acquisitions are not prepared. For example, mergers and acquisitions do not have more management talent pools. Recruiting outsiders has a lack of recognition of the company's culture and management. More importantly, it is expatriate talents, low-paid no-pays, high-paying fees. It does not cause much management and life issues.

In addition, the management system itself is not yet mature, or does not yet have the conditions for export, and the most important point is that there is no manager can be dispatched, and the key to the success or failure of chain pharmacy operations in the case of other output can not be output The manager of the store now has few chains for the store manager and the manager's ability to be dispatched, and the manager is mostly a woman, involving family children's care and other problems caused by many assignments.

In addition, buying a company is not the same as buying a product. Changes after a purchase require systematic thinking and gradual change. For example, there are regional differences in product output. Each merged chain has its own high-margin group of products, and the change is not easy. This means that there are also resistances to the promotion of integration.

There is also the author's opinion that the integration of information systems is the key to off-site mergers and acquisitions. It is an extension of the sense organs such as "eyes and ears". However, the unified information system in different places is a huge expense, and it needs to be coordinated by all the personnel of the acquiring party to succeed. All these need to be prepared and time-spent.