Alta Semper Capital Responds to HealthPlus Pioneer CEO Accusations, Issues a Q and A

Monday, September 28, 2020 / 02:37PM / By Alta Semper Capital /Header Image Credit: Ecographics

The majority of theBoard of HealthPlus Limited on Friday, September 25, 2020, issued aninstruction terminating, for cause, the appointment of former CEO Mrs. BukkyGeorge and asking Mr. Chidi Okoro to provide interim leadership for the Companyas its new Chief Transformation Officer ("CTO").

This difficult decisionwas made in full compliance with Nigerian law and following a long anddrawn-out process of engagement, through which the Board sought to addressmultiple issues with the way the Company was being managed. Despite a series ofsignificant breaches of the terms of Mrs.

George's engagement asCEO, the Board explored a range of options that would enable her to continue toplay an alternate leadership role. It unfortunately became clear that anamicable resolution was not going to be possible and that, as the multipleissues persisted, urgent action was required to avoid adverse impact on theentire business, including customers, employees, suppliers, and other keystakeholders.

As a result, themajority of the Board of Directors of the Company determined that a change ofleadership was required if HealthPlus was to achieve its strategic goals andthe former CEO's appointment was terminated in accordance with its terms.

The decision of AltaSemper Capital ("ASC") to acquire majority control of HealthPlus in 2018 andits belief in the Company's potential to become a market leader, not just inNigeria, but across the continent, is a testament to the strength of theHealthPlus brand. That is why ASC originally invested into the business andthat is why they committed to continue to invest, subject to the satisfactionof key performance targets. Although these targets were never achieved by theformer CEO, ASC still sought to provide the business with financial supportthrough growth capital. Despite a pressing need for cash in the Company overthe past year, Mrs. George has not only refused to agree to offers ofadditional investment on commercially reasonable terms but attempted to forceASC to restructure the existing binding contracts governing their relationship - agreements, which she readily signed in 2018 after taking independent legaland financial advice.

The original vision ofthe Company can still be achieved under new leadership and an enhancedmanagement structure, for the benefit of all stakeholders. In decisions likethis, the interests of the business and its employees must be put first, andthat 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 theBoard therefore urges the media and the general public to disregard furthercommunications from any individual or group that are contrary to theaforementioned.

Signed: Majority of the Board of HealthPlus Limited

Proshare Nigeria Pvt. Ltd.

____________

Afsane jetha

Director

_____________________

Zachary Fond

Director

Frequently AskedQuestions

TheBoard of HealthPlus recently announced some changes to position the company foradvanced stages of growth. In this exchange with Mr. Chidi Okoro, the new ChiefTransformation Officer, Chidi speaks on his vision for the Company, and thestrategic steps to reposition it amidst current and emerging opportunities inthe healthcare sector.

Q1. Youhave been around in the health sector for a while, how would you describeinvestments in the sector in Nigeria since the turn of the millennium?

Accessto quality and affordable healthcare is a fundamental right of citizens and acritical part of any human capital development process. You cannot have a happyand productive workforce contributing effectively to national development, ifyou don't have a healthy workforce. The COVID-19 pandemic has highlighted someof the critical challenges in the system today, and stimulated a new focustowards addressing them. To do this, much more investment is required.

Overthe last few years, we have started to see investments into the sector and AltaSemper's investment in Healthplus Nigeria was one of the first major moves inthis regard. But it is really important that we understand that it was just thefirst phase in a journey. For HealthPlus and the wider pharmaceutical andhealthcare sectors in Africa, much more investment is required in order toreach the levels required. We do hope many other investors are looking at thehealth sector in Nigeria and we need to give them every encouragement.

Q2. Where do you think the Nigerian health care system is heading-andwhat 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 medicareby the majority of Nigerians is still restricted. For instance, in the Pharmasector, there are just about five thousand registered retail outlets and tomatch global standards we need at least ten times more. HealthPlus Nigeria haschampioned the expansion of modern retail outlets that deliver qualitymedicines and solid pharmacy care. However, investments from healtcare-focusedfunds like Alta Semper is needed to unlock opportunity and reach the scale andefficiency that is required. Technology in the form of digital health is one ofthe ways we can enhance access. Our regulators, the Pharmacists Council ofNigeria, 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 regardingflattening the curve in the country?

Nigeria's response to COVID-19 has been very good. Steady collaborationacross federal and state governments led to low infection rates. Sadly, liveswere lost albeit much smaller number than in other climes. We have seendeclining infection rates but vigilance is still needed to continue to keep thesituation under check.

Q4. Youare on a new exciting mission at HealthPlus, how do you intend to achieve it?

We have veryexciting plans for the business, but if I were to disclose them to you today, Iwould be giving the game away! Suffice to say that the combination of new capital,acceleration in demand for pharmaceutical products across the continent andrapid changes in the way customers are served provides a really exciting basisfor growth.

Q5. How do you seethe company changing in the next two years?

I see the companychanging for the better in terms of its operations and profitability, and itsrelationships with key stakeholders. I hope to use my experience insuccessfully leading major corporate transformations to reposition the companyfor even greater accomplishments. HealthPlus remains an adored brand amongNigerians because the company has continuously maintained an enviable standardand is Nigeria's largest in the sector. Going forward, we want to consolidateby keeping our stakeholders happy from the common man on the streets who buysour products, to our suppliers, and to our workforce. Some of theserelationships need a little work to repair. We aim to create an environmentthat makes talented people want to work for us, suppliers keen to partner withus and customers happy to do business with us. These are some of the changesthat we hope to achieve.

Q6. How do you hopeto earn the trust of the members of staff and wider stakeholders?

The ability of ourstaff to deliver on our service promise is essential to our success. We arevery proud of the team that is in place. We have already briefed them on thesituation and will be actively reaching out to let them know our plans andprepare them for the exciting journey ahead. We are doing the same with oursuppliers, banks, regulators and ultimately, most importantly, our customers.Where there are relationships that need repair, they will be our most urgentpriority.

Q7. How long do youthink this transformation process would take?

Thestrategy is both a short term and a long term one. In the short term, we wantto ensure that the business is running as optimally as possible and any issuesare quickly resolved. In the long run, we want to consolidate and drive anexpansion that would complement the legacy built over the years.

Q8. What are thepossible challenges you are mindful of in this new role?

Even while facingthe challenges in the business today, I am focused on the opportunities tooptimize a great brand. We will be riding on a new platform of success atHealthPlus. I hope to imbibe a core set of principles that I garneredthrough continuous study and application in handling similar roles over theyears, and I am always open to new approaches that would complement ourcollective goals.

Q9. Will there bestaff restructuring or any form of cost-cutting in the immediate?

We have no plans todo 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 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 has 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.

Related News to HealthPlus and Alta Semper

1. HealthPlus: Attempted Hostile Takeover By ForeignPrivate Equity Firm - Proshare,Sept 25, 2020

2. Health Plus Announces Leadership Changes, Appoints ChidiOkoro as CTO - Proshare,Sept 26, 2020

3. 2 years afterreceiving $18m from Alta Semper Capital, HealthPlus is witnessing a powerstruggle - Tech Point, Sept 28, 2020

4. Alta SemperCapital Commits US$18mn to HealthPlus, West Africa's Leading RetailPharmaceutical Chain - The African Private Equity and VentureCapital Association, Mar 27, 2018

5. ProjectDescription - Alta Semper Ilera Fund I Limited (IFC-42586) - Early Warning System, Sept 04, 2019

6. Altasemper.com

7. Healthplus.com.ng