Overview of Sigma Healthcare's merger agreement with Chemist Warehouse

Sigma Healthcare Limited (ASX: $SIG) has entered into a Merger Implementation Agreement with CW Group Holdings Limited (Chemist Warehouse Group) to merge and create a leading healthcare wholesaler, distributor, and retail pharmacy franchisor. The proposed merger is subject to approval from CWG shareholders and Sigma shareholders. Sigma is also undertaking a fully underwritten pro-rata accelerated non-renounceable entitlement offer to raise gross proceeds of approximately $400 million to fund increased working capital required to implement the new Chemist Warehouse supply contract and progress business growth initiatives.

Executive commentary on the proposed merger

The proposed merger represents a significant and compelling opportunity for Sigma Healthcare Limited. The merger is expected to unlock significant efficiencies, with cost synergies initially estimated at approximately $60 million per annum. The MergeCo Board will be comprised of four independent directors, four CWG representatives, and Vikesh Ramsunder as Managing Director. Sigma's Board of Directors unanimously recommends that Sigma shareholders vote in favor of the resolutions.

Summary of the merger agreement and outlook

Sigma Healthcare Limited (ASX: $SIG) has entered into a Merger Implementation Agreement with CW Group Holdings Limited (Chemist Warehouse Group) to merge and create a leading healthcare wholesaler, distributor, and retail pharmacy franchisor. The proposed merger is subject to approval from CWG shareholders and Sigma shareholders. Sigma is also undertaking a fully underwritten pro-rata accelerated non-renounceable entitlement offer to raise gross proceeds of approximately $400 million to fund increased working capital required to implement the new Chemist Warehouse supply contract and progress business growth initiatives. The merger is expected to unlock significant efficiencies, with cost synergies initially estimated at approximately $60 million per annum. The proposed merger is subject to a number of conditions including ACCC and OIO approvals, CWG shareholder approval, and Sigma shareholder approvals. Post completion of the merger, the MergeCo Board will be comprised of four independent directors, four CWG representatives, and Vikesh Ramsunder as Managing Director. The company's ambitions include creating a leading healthcare wholesaler and distributor, and the outlook is positive with the expected unlocking of significant efficiencies and cost synergies.