Pharmacy group Dis-Chem on Monday announced it will enter the health insurance sector through the acquisition of a quarter of Kaelo Holdings, a company formed to make health care more accessible to less affluent South Africans.
The acquisition would build on current and previous investments, which taken together, would position Dis-Chem to augment the provision of care in a rapidly evolving primary health-care
The effective date of the transaction is May 1 2021, as the transaction is subject to approval by the Competition Tribunal and the fulfilment of “commercial suspensive” conditions. These conditions were not disclosed.
“The group is pleased to announce that it has entered into agreements with the founding shareholders and management of the Kaelo group of companies, in which it will acquire 25% of the issued share capital and shareholder claims of Kaelo Holdings,” Dis-Chem said.
Kaelo declined to give the value of the transaction.
Over the past 15 years, Kaelo has grown its offering, which today features a portfolio of health assets.
“In addition to providing benefit-rich gap and primary health-care insurance products, Kaelo is a leading managed care organisation, operator of occupational health clinics, and owner of the AskNelson psychological wellbeing platform,” Dis-Chem said.
“With the public health-care system overwhelmed and private health care out of reach for many, the opportunity for affordable and quality primary health-care insurance is sizeable,” it said.
Through a combination of Dis-Chem’s primary care infrastructure, and the equity position in Kaelo, the pharmacy group will be in a position to positively influence product design and the biggest cost drivers of primary health-care consumption, it said.
Kaelo CEO John Jutzen said his company was honoured to do an equity deal with Dis-Chem. “We have a long-standing relationship with Dis-Chem and are excited that this is a deal around synergy,” he said.
“Dis-Chem will continue with other clients, but with us will work closely to develop products and pathway logistics for health care,” he said.
Dis-Chem’s growing store footprint and in-store capabilities, including nurses and sisters and clinics in every store was attractive to Kaelo, he said.
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