- Pharmacy group Clicks is looking to spend R105 million to acquire Sorbet Holdings.
- This will add over 190 salons to the pharmacist's more than 850 stores in SA, and will be its first franchise chain.
- Sorbet was founded in 2005, and was sold to Old Mutual Private Equity as part of the acquisition of Brian Joffe's Long4Life.
- For more financial news, go to the News24 Business front page.
SA's largest pharmacist Clicks says it wants to take full ownership of salon owner Sorbet Holdings for R105 million, something that would add a franchise chain to the JSE-listed group.
Clicks already has 25% of Sorbet Brands, which holds the intellectual property of the group, but control of the holding structure will give it full ownership of all entities, including salons which operate under the banners of Sorbet, Sorbet Man and Candi & Co.
The acquisition would add over 190 salons to the pharmacist’s more than 850 SA stores, and mark its first acquisition of a franchise chain.
Clicks is acquiring Sorbet from Old Mutual Private Equity, who picked up the business earlier in 2022 as part of the previously listed Long4Life group. Sorbet was founded by Ian Fuhr in 2005.
"Sorbet has a natural strategic fit and is closely aligned with Clicks Group’s health, beauty and wellness offering," Clicks CEO Bertina Engelbrecht said in a statement on Thursday.
"Sorbet is a highly trusted brand with a loyal and growing customer base, and we aim to capitalise on the opportunities to expand our presence together and accelerate revenue growth."
Sorbet products are currently sold in Sorbet salons and Clicks stores and the transaction will ensure that these products will be sold in the Clicks stores in perpetuity, the pharmacist said.
"This is our first foray into owning a franchise chain. However, Clicks Group supports the growth and empowerment of small, independent business ownership and we are committed to retaining the highly successful Sorbet franchise model," said Engelbrecht.
The Sorbet Group will remain located in Johannesburg and its CEO, Linda Sinclair, will report to the Clicks Group CEO. All Sorbet employees will be transferred to the Clicks Group.
Jacci Myburgh, co-head of Old Mutual Private Equity, said: "We acquired Sorbet as part of the Long4Life delisting. As Sorbet is below the size of investment that we would typically hold, our intent was always to sell the business to an appropriate owner. Clicks is a logical owner of Sorbet given that it is an existing joint venture stakeholder in the Sorbet brand."
Linda Sinclair, CEO of Sorbet, said: "Sorbet has walked a successful road with Clicks since becoming an affinity partner in 2011 and then Clicks Group investing in Sorbet Brands in 2015."
"Clicks has played an instrumental role in supporting the growth of Sorbet into becoming a leading professional beauty and grooming franchise brand. Our values are strongly aligned with Clicks and we look forward to delivering on future growth opportunities as part of the Clicks Group."
The proposed transaction is subject to approval by competition authorities.
Shares of the pharmacy group were up 0.5% to R294.92 in midday trade on Thursday, valuing the group at about R72 billion. Clicks has fallen more than 7% so far in 2022.
Correction: An earlier version of this article incorrectly said Clicks owned 25% of Sorbet Holdings, when it owned a stake of that size in Sorbet Brands, which holds the entity's intellectual property. News24 regrets the error.