Former intern becomes billionaire in Australia pharmacy merger

SYDNEY - A corporate tie-up in Australia will produce a parade of fortunes in an industry hardly known for extravagance.

More than 100 shareholders will officially be millionaires. At least 10 will be worth more than US$100 million (S$135 million). And atop the group are three billionaires, including one former intern.

Behind this blitz of riches, rare even for Australia where a decades-long mining boom has minted fortunes, is the merger of closely held pharmacy franchiser Chemist Warehouse with publicly traded Sigma Healthcare – a deal that will create one of Australia’s largest pharmacy chains and wholesalers.

The biggest winners: Chemist Warehouse’s founders – Mr Jack Gance and his brother Sam – and Mr Mario Verrocchi, who rose from intern to become the chain’s chief executive. Each will be worth at least US$2.5 billion when shares in the combined entity start trading on Feb 13, according to the Bloomberg Billionaires Index. Mr Verrocchi will have a fortune of US$4.4 billion.

The deal is hailed both as a rags-to-riches example of the Australian “battler” sentiment, and as a glaring example of how low-cost chains edge out legions of mom-and-pop pharmacies. It is also a coming out, of sorts, for the trio who built the chain over decades, largely while staying behind the scenes.

The chain started with a lone pharmacy in northern Melbourne and is now a ubiquity in Australia – so famous that an episode of the nation’s hit children’s animated series Bluey was set in a store. Legions flock to its bright-yellow storefronts to fill prescriptions cheaply, buy generic and discounted over-the-counter drugs, and browse its selection of nutritional supplements, toothpaste and other household goods that are stacked high around the stores. 

Combined with Sigma, it will franchise or co-own more than 900 pharmacies in Australia, New Zealand and Ireland, and a handful in Dubai and China. It’ll also supply products to more than 3,500 stores. Taken together, the two companies collected A$6.7 billion (S$5.7 billion) of revenue in 2024.

The Gance brothers, sons of Polish parents who fled during World War II and settled in Australia, both studied pharmacy at university. In 1972, they bought their first pharmacy. They later expanded and began coordinating their supply chain with other chemist stores. The strategy culminated with the creation of what would become Chemist Warehouse – a drug store franchise modelled on big-box retailers competing on price. 

Helping them grow this concept was Mr Verrocchi. After he graduated with a degree in pharmacy, the brothers hired him in 1980 because they would open a store in a neighbourhood full of Italian migrants and needed someone who knew the language, Mr Verrocchi has said. The three will collectively own roughly 48 per cent of the combined entity.

Sigma, the other party in the transaction, was founded in 1912 by two Melbourne pharmacists and went public in 1999. It largely operated as a wholesaler before buying its first pharmacy franchiser in 1997. BLOOMBERG