The majority of the Board of HealthPlus Limited on Friday, September 25, 2020, issued an instruction terminating, for cause, the appointment of former CEO Mrs. Bukky George and asking Mr. Chidi Okoro to provide interim leadership for the Company as its new Chief Transformation Officer (“CTO”).
This difficult decision was made in full compliance with Nigerian law and following a long and drawn-out process of engagement, through which the Board sought to address multiple issues with the way the Company was being managed. Despite a series of significant breaches of the terms of Mrs. George’s engagement as CEO, the Board explored a range of options that would enable her to continue to play an alternate leadership role.
It, unfortunately, became clear that an amicable resolution was not going to be possible and that, as the multiple issues persisted, urgent action was required to avoid adverse impact on the entire business, including customers, employees, suppliers, and other key stakeholders.
As a result, the majority of the Board of Directors of the Company determined that a change of leadership was required if HealthPlus was to achieve its strategic goals and the former CEO’s appointment was terminated in accordance with its terms.
The decision of Alta Semper Capital (“ASC”) to acquire majority control of HealthPlus in 2018 and its belief in the Company’s potential to become a market leader, not just in Nigeria, but across the continent, is a testament to the strength of the HealthPlus brand. That is why ASC originally invested into the business and that is why they committed to continue to invest, subject to the satisfaction of key performance targets.
Although these targets were never achieved by the former CEO, ASC still sought to provide the business with financial support through growth capital. Despite a pressing need for cash in the Company over the past year, Mrs. George has not only refused to agree to offers of additional investment on commercially reasonable terms but attempted to force ASC to restructure the existing binding contracts governing their relationship â€“ agreements, which she readily signed in 2018 after taking independent legal and financial advice.
The original vision of the Company can still be achieved under new leadership and an enhanced management structure, for the benefit of all stakeholders. In decisions like this, the interests of the business and its employees must be put first, and that is what the Board has done. Mrs. George continues to serve on the Board, while Mr. Okoro oversees the day-to-day operations of the Company.
The majority of the Board therefore urges the media and the general public to disregard further communications from any individual or group that are contrary to the aforementioned.
Signed: Majority of the Board of HealthPlus Limited
Frequently Asked Questions
The Board of HealthPlus recently announced some changes to position the company for advanced stages of growth. In this exchange with Mr. Chidi Okoro, the new Chief Transformation Officer, Chidi speaks on his vision for the Company, and the strategic steps to reposition it amidst current and emerging opportunities in the healthcare sector.
Q1. You have been around in the health sector for a while, how would you describe investments in the sector in Nigeria since the turn of the millennium?
Access to quality and affordable healthcare is a fundamental right of citizens and a critical part of any human capital development process. You cannot have a happy and productive workforce contributing effectively to national development if you don’t have a healthy workforce. The COVID-19 pandemic has highlighted some of the critical challenges in the system today and stimulated a new focus towards addressing them. To do this, much more investment is required.
Over the last few years, we have started to see investments into the sector and Alta Semper’s investment in Healthplus Nigeria was one of the first major moves in this regard. But it is really important that we understand that it was just the first phase of a journey.
For HealthPlus and the wider pharmaceutical and healthcare sectors in Africa, much more investment is required in order to reach the levels required. We do hope many other investors are looking at the health sector in Nigeria and we need to give them every encouragement.
Q2. Where do you think the Nigerian health care system is heading-and what needs to be done?
Nigeria’s health sector is still nascent but opportunities are evident. With a low healthcare professional to patient ratio, access to quality medicare by the majority of Nigerians is still restricted. For instance, in the Pharma sector, there are just about five thousand registered retail outlets and to match global standards we need at least ten times more.
HealthPlus Nigeria has championed the expansion of modern retail outlets that deliver quality medicines and solid pharmacy care. However, investments from healthcare-focused funds like Alta Semper is needed to unlock opportunity and reach the scale and efficiency that is required. Technology in the form of digital health is one of the ways we can enhance access. Our regulators, the Pharmacists Council of Nigeria, I am sure will be looking at this.
Q3. The COVID-19 pandemic presented a major health challenge globally. What is your assessment of Nigeria’s response and your projection regarding flattening the curve in the country?
Nigeria’s response to COVID-19 has been very good. Steady collaboration across federal and state governments led to low infection rates. Sadly, lives were lost albeit much smaller number than in other climes. We have seen declining infection rates but vigilance is still needed to continue to keep the situation under check.
Q4. You are on a new exciting mission at HealthPlus, how do you intend to achieve it?
We have very exciting plans for the business, but if I were to disclose them to you today, I would be giving the game away! Suffice to say that the combination of new capital, acceleration in demand for pharmaceutical products across the continent and rapid changes in the way customers are served provides a really exciting basis for growth.
Q5. How do you see the company changing in the next two years?
I see the company changing for the better in terms of its operations and profitability, and its relationships with key stakeholders. I hope to use my experience in successfully leading major corporate transformations to reposition the company for even greater accomplishments. HealthPlus remains an adored brand among Nigerians because the company has continuously maintained an enviable standard and is Nigeria’s largest in the sector.
Going forward, we want to consolidate by keeping our stakeholders happy from the common man on the streets who buys our products, to our suppliers, and to our workforce. Some of these relationships need a little work to repair. We aim to create an environment that makes talented people want to work for us, suppliers keen to partner with us and customers happy to do business with us. These are some of the changes that we hope to achieve.
Q6. How do you hope to earn the trust of the members of staff and wider stakeholders?
The ability of our staff to deliver on our service promise is essential to our success. We are very proud of the team that is in place. We have already briefed them on the situation and will be actively reaching out to let them know our plans and prepare them for the exciting journey ahead. We are doing the same with our suppliers, banks, regulators and ultimately, most importantly, our customers. Where there are relationships that need repair, they will be our most urgent priority.
Q7. How long do you think this transformation process would take?
The strategy is both a short term and a long term one. In the short term, we want to ensure that the business is running as optimally as possible and any issues are quickly resolved. In the long run, we want to consolidate and drive an expansion that would complement the legacy built over the years.
Q8. What are the possible challenges you are mindful of in this new role?
Even while facing the challenges in the business today, I am focused on the opportunities to optimize a great brand. We will be riding on a new platform of success at HealthPlus. I hope to imbibe a core set of principles that I garnered through continuous study and application in handling similar roles over the years, and I am always open to new approaches that would complement our collective goals.
Q9. Will there be staff restructuring or any form of cost-cutting in the immediate?
We have no plans to do so as of today.
About Alta Semper Capital LLP
Alta Semper, a private equity manager investing flexible and strategic capital across select African growth markets, announced in 2018 a partnership with Nigeria’s leading retail pharmacy chain HealthPlus. Under the terms of the agreement, Alta Semper invested US$18mn into HealthPlus, which was to enable the company to expand its retail footprint and enhance its competitive position. Alta Semper specifically invests into market-leading businesses in defensive sub-sectors within the consumer and healthcare verticals.
The healthcare and retail markets in Nigeria are characterised by growing demand, driven by favourable demographics, increased consumer awareness and evolving consumption patterns. Furthermore, Nigeria is home to one of the least penetrated formal retail markets in the world, despite its large and growing population. The retail pharmacy sector is highly fragmented, with many independent drug stores and several patent medicine outlets.
Furthermore, given structural challenges with the industry supply chain, counterfeit pharmaceuticals find their way into over forty percent of the retail market, while most wholesale and retail sales across the country are still made through informal markets. Moreover, much of the healthcare infrastructure is confined to major cities, with people living in urban areas having approximately four times as much access to healthcare as those living in rural areas.
The investment into HealthPlus was to enable the Company capture the pent-up demand for high-quality yet affordable healthcare and professional beauty supplies by developing regional distribution centres in commercial hubs across Nigeria, rapidly expanding the Company’s footprint across Nigeria as well as developing a wholesale channel and investing in private label and e-commerce.
Healthplus was Alta Semper’s first investment in Nigeria.
About HealthPlus Limited
HealthPlus was founded in 1999 by Mrs. Olubukunola Adewunmi (Bukky) George, FPSN, a Nigeria and UK-trained pharmacist with over 25 years of experience in the pharmaceutical industry, who has organically grown the business into the leading pharmacy chain and retailer of beauty supplies in West Africa.
The Company’s quest is to provide the Nigerian consumer with high-quality, life-saving and affordable products and services. Furthermore, the Company aims to make a meaningful and lasting impact by contributing its quota to the achievement of universal healthcare coverage and to increasing life expectancy for all Nigerians.
The Company targets a broad base of consumers through the provision of healthcare products such as prescription and over-the-counter medicines, nutritional supplements, natural remedies, home medical equipment, mobility aids and pharmacy services. The Company employs over 700 people which includes 150 pharmacists, with at least two pharmacists dispensing prescription medicines and providing counselling, free health screenings and value-adding pharmacy services at each pharmacy.
It operates branches in strategically-located residential areas, shopping centres and airports across 11 of the 36 states in Nigeria. HealthPlus has one of the highest brand recognition and ratings of any consumer company in Nigeria.
The Company’s dedication and professionalism have been recognised with several excellence awards including the ICERTIAS Best Buy Award for #1 Pharmacy in Best Price-Quality Ratio 2017, the Nigerian Customer Service Award for Best in the Pharmaceutical Category 2017 and the Nigeria Healthcare Excellence Award (NHEA) 2016, 2015, 2014.
The Deal Advisors in 2018
- Alta Semper’s legal advisors were Olaniwun Ajayi LP and international law firm Hogan Lovells International LLP.
- HealthPlus’ financial advisor was CardinalStone Partners and legal advisory was provided by Banwo & Ighodalo.