Buying a Pharmacy in Ireland: A Practical Guide

Introduction

Buying a pharmacy in Ireland is a complex transaction that extends well beyond the purchase price, involving careful legal, financial and regulatory planning.

In this Guide, Gríana O’Kelly, Head of Corporate & Commercial, sets out the core components of a typical pharmacy acquisition, from initial assessment to completion.

For guidance on the steps involved in selling a pharmacy, see our prior article Pharmacy Sales in Ireland: A Practical Guide

Share Purchase Structure

Pharmacy acquisitions in Ireland are corporate transactions that are commonly structured as a share purchase of the trading company, meaning the buyer acquires the shares of the company operating the pharmacy. While it is possible to structure the transaction as a business purchase, this approach is less commonly used.

One key factor in any acquisition is the pharmacy's property interest, as the value and the pharmacy's goodwill are intrinsically linked to its premises. Regard should be had to ensure the buyer will acquire good title to the premises allowing for business continuity without interruption.

Many pharmacy businesses operate under a lease. For a buyer, clarity and security of tenure are critical, while a strong remaining lease term is essential to protect the value of the acquisition. This is also a key requirement for any bank providing acquisition funding.

Preparing to Buy a Pharmacy

Before agreeing the purchase price for a pharmacy, the proposed buyer will carry out a thorough assessment of the target business. This includes reviewing the pharmacy's financial performance, understanding its customer base and location, and considering its growth potential.

Buyers will conduct initial financial due diligence to support the proposed purchase price or value attributable to the target business. This often involves engaging a corporate finance firm or accountant to review the pharmacy's financial and tax records.

If both parties agree to proceed, a Heads of Agreement (a non-binding outline of the deal), will be drawn up and signed, and full legal, tax and financial due diligence will begin.

Legal, Tax & Financial Due Diligence

Due diligence is a critical stage for any buyer. It is the buyer's opportunity to investigate the target business in detail and identify any risks or liabilities before completing the acquisition. A buyer's solicitor will typically request information and documentation across several key areas, including:

• The company's corporate status and history to include a review of the target’s statutory books and records, to confirm they are fully up to date

• Copies of all employment contracts and an employee schedule, including pay rates and non-statutory employee entitlements

• The pharmacy's Pharmaceutical Society of Ireland (“PSI”) Certificate and Health Service Executive (“HSE”) contract

• Any purchasing agreements with the pharmacy’s suppliers

• Details of any lease or hire-purchase agreements for shop equipment (e.g. tills and prescription management systems)

• The pharmacy's data protection policy, to confirm GDPR compliance

• Current insurance schedules

• All relevant property documentation, including the lease or applicable root of title if the freehold is being acquired, planning permissions and any related certificates

This list is not exhaustive, and buyers should expect to carry out comprehensive due diligence to fully understand the business being acquired.

Core Legal Documentation

If the transaction proceeds by way of a share purchase, the principal legal documents will be the Share Purchase Agreement ("SPA") and a Tax Deed of Covenant.

The SPA contains various warranties (legal assurances) and protections for the buyer, especially around tax liabilities that may arise post-completion that relate to the seller’s period of ownership prior to completion.

From the buyer's perspective, it is important to:

• Ensure the warranties in the SPA are comprehensive and cover all material aspects of the business

• Carefully review the seller's Disclosure Letter to understand any qualifications or exceptions to the warranties

• Negotiate appropriate indemnities and protections in respect of any identified risks or liabilities found during due diligence

• Ensure adequate remedies are in place in the Tax Deed of Covenant

Review Property Arrangements

The buyer’s legal team will closely examine the pharmacy’s property arrangements. This is a critical part of the due diligence process and typically includes:

• Reviewing the lease to confirm the remaining term, rent review provisions and any restrictions on use or assignment

• Checking planning documents to ensure the premises has the appropriate permissions for pharmacy use

• Confirming that no Deed of Renunciation has been signed (which could affect the tenant's rights under the lease)

• Reviewing any licences or consents that may be required from the landlord in connection with the change of ownership

Where the pharmacy operates under a lease, the buyer should ensure that the lease provides sufficient security of tenure to protect the investment. Identifying any property‑related issues at an early stage can help to avoid potential delays or complications later in the transaction.

Regulatory Compliance

It is worth noting that a pharmacy's PSI registration and HSE contract do not automatically transfer to a new owner. These will be terminated upon the change of ownership and the buyer will need to obtain new registrations in order to operate the pharmacy post-completion.

It is essential for the buyer to liaise with both the PSI and the HSE well in advance of completion, to ensure all necessary applications are in train and that a seamless transition is achieved on closing.

Net Asset Valuation & Completion Process

In many pharmacy transactions, the purchase price is structured so that the agreed price is adjusted by the net asset value of the Company on completion. This mechanism is achieved through a completion accounts process.

Key points for buyers to consider:

• Obtain independent tax and financial advice ahead of completion to structure the acquisition in a tax-efficient way

• Understand how surplus or deficit net assets will be treated under the SPA, this usually forms part of the consideration

• Ensure the completion accounts mechanism is clearly set out in the SPA, including any dispute resolution procedure

• Consider any working capital requirements for the pharmacy business from the date of completion

• If funding is being obtained, ensure that the bank’s security requirements and related conditions are addressed in a timely manner and given due consideration by your solicitor

Conclusion

Buying or acquiring a pharmacy in Ireland can be a rewarding investment, but it is a process that requires forward planning and thorough preparation. From transaction structure and due diligence to property review and funding requirements, careful consideration at each stage can help to avoid delays and support a smoother transaction process.

With the right professional advice and a clear understanding of the steps involved, buyers can approach an acquisition with confidence, supporting a successful transition and helping to ensure the long‑term viability of the pharmacy.

If you are considering selling your pharmacy, our expert Corporate & Commercial Team can guide you through each stage of the process.

Further Information

For guidance on the steps involved in selling a pharmacy, see our prior article Pharmacy Sales in Ireland: A Practical Guide

For expert legal advice on the acquisition of a Pharmacy or any related matter, please contact Gríana O’Kelly, Partner and Head of our Corporate & Commercial Team.