New Clicks Australia Completes A$107M Management Buyout


New Clicks Australia Completes Management Buy-Out
From South African Parent

New Company to be called New Price Retail
New Price Retail confirms commitment to fast growth in Australia
• New Price Retail - a world class Australian pharmacy, health, beauty and lifestyle retail services company
• Localised ownership and decision making
• Enhanced speed, efficiency and responsiveness
• Expanded options for future growth

18 February 2004 - New Clicks Australia Pty Ltd - operator of Priceline, Priceline Pharmacy, Price Attack and House - and Australia’s leading supplier of products and services to retail brands in the pharmacy, health, beauty and lifestyle sectors - today announced Australian management has completed the purchase of the company from South African owner New Clicks Holdings (NCH).

Reflecting the change of ownership, the company has been renamed New Price Retail.

New Price Retail management, led by Group Leader Jeff Sher and with the backing of high-profile private equity investors ABN AMRO Capital, Castle Harlan Australian Mezzanine Partners and Investec Wentworth Private Equity, paid $107 million consideration to purchase the company from NCH. The transaction was financed with a combination of debt and equity.

In its most recent financial year ended 31 August 2003, New Price Retail - formerly known as New Clicks Australia - reported an operating profit of $14.8 million, up 58% compared with an operating profit of $9.4 million for 2001/02. Operating profit for 2002/03 included Price Attack for the first time. Sales for the year ended 31 August 2003 totalled $497 million, up 40% on comparative period sales of $350 million.

The management buy-out will substantially enhance New Price Retail’s responsiveness to local growth opportunities, with improved speed and flexibility.

“This transaction allows New Price Retail to pursue a range of options for growth - both organically and via acquisition – with the ability to source its own funding as a stand alone business,” said Jeff Sher, Group Leader of New Price Retail.

“The transaction removes any ambiguity regarding our future growth strategy, particularly in pharmacy, where we are absolutely committed to rapid expansion within the existing regulatory framework,” Mr Sher said. “Our model is in full support of the Pharmacy Guild’s objectives and sees pharmacists own and operate their stores under a franchise system.”

A spokesperson representing the three equity funders said: “We are delighted to support management in the buy out of New Clicks Australia and the creation of New Price Retail. It is an exciting opportunity to be able to partner with this strong management team to take this already successful business to its next stage.“

Jeff Sher said: “New Price Retail has a solid financial base from which to drive the substantial expansion opportunities that exist right across the portfolio of its market-leading brands.”

“With this transaction, New Price Retail will cement its position in Australian retail services and will be free to pursue an exciting range of growth options. The combination of the company's existing business model, its retail franchise and distribution services, its financial capability, and its established local business relationships strongly positions the business for growth,” Mr Sher said.

“New Price Retail's management team is focused, skilled and has a proven track record of excellence in delivering retail services. This transaction assures the company retains its senior management team longer term, and provides management generally with substantial prospects for career advancement,” he said.

“This transaction provides the right platform for our franchisees going forward. The company will continue to deliver leading edge retail and distribution services with our unique blend of retail skills, marketing expertise and efficient distribution. Our continued commitment to our multi-brand strategy is steadfast,” Mr Sher said.

“New Price Retail and South African based New Clicks Holdings will maintain a close relationship and a valuable partnership into the future. There are significant opportunities for us to cooperate in important areas, such as joint buying, sharing information, leveraging skills and swapping intellectual capital,” Mr Sher said.
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For further information contact:
Chris Savage, Savage & Horrigan
Phone: 02 9268 1502
Mobile: 0404 012 266

About New Price Retail Pty Ltd
New Price Retail was formerly known as New Clicks Australia and was part of South African-based retail group New Clicks Holdings Limited, which listed on the Johannesburg Securities Exchange in March 1996. New Price Retail operates the Priceline, Priceline Pharmacy, Price Attack and House brands, with 139 company owned and 201 franchised outlets. New Price Retail employs more than 3,000 people.

The company name, New Price Retail, is a reflection of the company’s heritage, value proposition and core competency. ‘New’ reflects the company’s heritage and recognises this history as the guiding principle to the future; ‘Price’ reflects the value proposition inherent in the company’s retail offer; ‘Retail’ reflects the company’s core competency in leading edge retail and distribution services.

For more information on New Price Retail, please visit www.newpriceretail.com.au

Savage & Horrigan