Chemist Warehouse’s Di Pilla di lution
The numbers are in on Chemist Warehouse’s reverse takeover of Sigma. Cheap hindsight tells us that a regular IPO would’ve cost Chemist Warehouse shareholders $100 million, but saved them $3 billion.
The Chemist Warehouse Group finally hit the ASX boards on 12 February, 15 months after its backdoor listing via Sigma Healthcare was first proposed.
Year after year, Chemist Warehouse sat at the top of every bulge bracket investment bank’s IPO wish list, and founders Mario Verrocchi and Jack and Sam Gance broke the (ice-cold) hearts of Australia’s investment bankers by eschewing a conventional float.
“We looked at IPO-ing, and it’s extremely expensive,” Verrocchi told the Australian Financial Review in March 2024, when the merger was still pending regulatory approval. “When we started hearing $100 million, $90 million (of fees), our heart stops. We’re not used to spending that sort of money.” In aid of his abstemious self-narrative, the AFR even noted the threadbare carpet beneath Verrocchi’s feet at the company’s headquarters in the far-from-salubrious Melbourne suburb of Preston. “This whole cost thing was really worrying me personally. It was like, ‘Don’t worry about it, Mario, just pay’. And I was like, ‘No, it’s not what I do’.”