Fontana Limited has signed an agreement to acquire the Monarch chain of pharmacies from Gerk Limited, a Loshusan connected company.

The deal was announced yesterday by the publicly listed pharmacy chain which has seven stores spread across six parishes. The announcement noted that due diligence would begin shortly, with the transaction expected to close during the company’s third quarter (January to March). The operational changes and integration into the existing Fontana network would be completed throughout the remainder of 2025.

“We are extremely excited about the addition of Monarch Pharmacies to the Fontana family. This acquisition is an important step in our mission to continue growing our brand and providing customers with the best possible health-care products and services. Additional locations will strengthen our ability to serve our communities, expand our customer base, and further solidify Fontana Pharmacy as a leading name in pharmacy care and retail in Jamaica,” said Fontana Chief Executive Officer Anne Chang in the press release.

When the Jamaica Observer asked about the structure of the deal, Chang said that she couldn’t give any additional details in the preliminary stages. Fontana had $1.19 billion in cash as of September 30 and has sourced all of its external debt financing from The Bank of Nova Scotia Jamaica Limited (BNSJ).

Fontana had acquired the assets and goodwill of Azmart Limited, a haberdashery business in January 2013. Azmart Limited is where its current Barbican location is situated. Fontana Kingston Limited (FKL), a subsidiary of First Venture Investments Limited, had acquired the Azmart business for US$400,000. Fontana Limited acquired the business and assets of FKL in July 2018 prior to the company’s initial public offering on the Jamaica Stock Exchange (JSE).

“We have a culture that’s been for 57 years and, as you know, anywhere, you have to fit into that culture. We don’t really know these employees, but our intention is we are looking to retain as many as possible. You have to look at how things have been run, listen to the culture and all of those questions we don’t know the answers to as yet,” Chang stated in response to queries about what would be done with the Monarch locations which are in close proximity to some of its seven stores.

Monarch has three Kingston locations by Sovereign Centre in Liguanea, Loshusan Plaza in Barbican, and Tropical Plaza by Half-Way-Tree along with a Portmore location by Sovereign Village. The Loshusan Plaza location is a four-minute walk from Fontana’s Barbican location, while the Sovereign Centre location is a four-minute drive from Fontana Barbican. Monarch’s Portmore location is within eyeshot of Fontana’s Portmore location, about 200 metres away.

“We’re always looking for growth opportunities as they present themselves, and we’re welcoming to them and seeking them out. We have been building our corporate team towards these types of things and also looking to spread the cost in our shared services across more locations. We have some big things coming up, so stay tuned,” Chang added on the growth prospects for Fontana.

Fontana grew its revenue by 11 per cent in its June 2024 financial year to $8.13 billion, which included eight months of its new Portmore location which was opened in November 2023. The company’s operating profit contracted seven per cent to $696.52 million as it incurred additional costs with its new Portmore location.

Despite that slight dip in operating profits, Chang is upbeat about its Portmore operations, which she says is on target. She also noted that the company is now seeking more warehouse space as it gears up for this acquisition.

After accounting for higher finance charges, Fontana’s profit before tax decreased four per cent to $629.83 million and net profit dipped 10 per cent to $589.78 million. The decrease in net profit was due to the company’s 100 per cent tax remission ending in January 2024 and it now being subject to 50 per cent of the normal 25 per cent income tax rate.

Fontana’s asset base grew 10 per cent to $5.68 billion by June 30, with current assets at $3.34 billion. Total liabilities and shareholders equity closed at $2.77 billion and $2.91 billion, respectively.

“After 35 years in the pharmacy business, the Loshusan family has decided to streamline their operations and focus on retail food and property development. Because of our strong relationship with Anne Chang and Ray Therrien, we are extremely pleased that Fontana Pharmacy is acquiring our chain of pharmacies and are confident that they will continue the tradition of retail pharmacy excellence that Monarch started over three decades ago,” stated Bruce Loshusan in the press release.

According to the Companies Office of Jamaica, Gerk Limited’s company status is listed as in removal with reference to BO, which is beneficial ownership. Bruce Andrew Loshusan and Earl Loshusan are listed as the company directors.

First Capital Corporation Limited, a company connected to the Loshusan family, received approval from the National Environmental and Planning Agency (NEPA) last year to develop an office and commercial complex of more than 5,000 square meters by 1-5 Tobago Avenue, New Kingston.

This is the latest pharmacy acquisition in the Caribbean following the acquisition of 10 Massy Pharmacies in Trinidad and Tobago between Massy Holdings Limited and Agostini’s Limited which paid TT$22 million in September 2024. This deal was an asset acquisition, with the pharmacies rebranded to Mpharmacy. Indies Pharma Jamaica Limited is the only other company on the JSE with its own pharmacy, which is the Trident Pharmacy in Montego Bay.

Fontana traded down 3.47 per cent to close Thursday at $7.79, which left the stock down four per cent in 2025 with a market capitalisation of $9.73 billion. Fontana’s stock price dipped 19 per cent in 2024 and peaked in July 2023 with an intraday high of $13.47 and closing price of $12.70. The company’s second quarter report is set to be released by February 14.

Fontana shareholders will get the chance to interrogate Fontana’s board and management on March 7 when the company holds its annual general meeting (AGM). The AGM will be held at 11:00 am by the Grand-A-View Hotel, 3 Ramparts Close, Montego Bay, St James. Raymond Therrien, Anne Chang, and Larren Peart will be up for re-election by shareholders as directors on the board.