Toronto-based private equity firm Birch Hill Equity Partners has inked a deal to acquire Rexall Pharmacy Group and Well.ca from McKesson Corp., signaling a shift toward Canadian ownership for both brands. Rexall operates 385 pharmacies across the country and employs roughly 8,000 people, while Well.ca offers over 40,000 health and wellness products online.
The acquisition, announced Thursday, is expected to fuel growth and innovation for the two companies. “This could be the spark that accelerates the expansion and modernization of these brands in Canada,” said Liza Amlani, co-founder of the Retail Strategy Group, in an email statement.
What the Rexall and Well.ca Acquisition Means for the Canadian Retail Landscape
Rexall currently holds a smaller footprint compared to Shoppers Drug Mart, the pharmacy giant owned by Loblaw Companies Ltd., which boasts more than 1,300 locations nationwide. “The new leadership could help Rexall innovate and stay competitive in a market largely dominated by Shoppers,” Amlani noted.
Birch Hill, which has previously managed brands like Mastermind Toys and Sleep Country, is committed to maintaining and investing in accessible healthcare services, with plans to grow Rexall’s network of pharmacies across Canada. McKesson, however, will remain a key supplier for Rexall and Well.ca, ensuring continuity during the transition.
Birch Hill’s Plan for Expanding Rexall’s Pharmacy Network
Joanne McNeish, an associate professor at Toronto Metropolitan University, emphasized the significance of keeping Rexall and Well.ca in Canadian hands. However, she expressed concerns about the involvement of a private equity firm, noting that such firms often prioritize short-term profits. “Private equity tends to focus on flipping companies for a quick return, rather than making long-term investments,” McNeish said.
Despite this, Amlani sees potential for revitalizing both brands. “Rexall needs updates to its stores, loyalty program, and product selection,” she said. “Well.ca has a strong product lineup, but more investment in brand power and marketing could take it further.”
Financial details of the agreement were not disclosed. McKesson, a U.S.-based healthcare services firm, said it is divesting the two companies to focus on its core oncology and biopharma operations.
This deal presents an opportunity for Birch Hill to test its retail expertise in the healthcare sector, potentially setting the stage for a new era in Canadian pharmacy and wellness retail.
