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Introduction
Selling a pharmacy in Ireland involves far more than finding a buyer, it’s a detailed process that includes several legal, financial and regulatory considerations.
Our Guide outlines the key stages in a typical pharmacy sale, from valuation to completion, to help sellers prepare for a successful transaction and avoid common pitfalls.
Share Sale Structure
Pharmacy sales in Ireland are corporate transactions that are commonly structured as share sales, meaning the buyer acquires the shares of the company operating the pharmacy.
One key factor in the sale is the pharmacy’s property interest, as the business's value and the pharmacy’s goodwill are intrinsically linked to its premises.
Typically, most pharmacies operate under a lease. For a buyer, having clarity and security over that lease is crucial. A strong lease term is imperative to ensure business continuity and value in the acquisition.
Preparing to Sell a Pharmacy
Before going to market, it’s advisable to obtain a professional valuation to confirm the current market value of your pharmacy. Once a buyer is identified, either through a broker, corporate finance firm or direct interest, the buyer will usually conduct initial financial due diligence to support the proposed purchase price or value attributable to the target business.
If both parties agree to proceed, Heads of Agreement (a non-binding outline of the deal) are drawn up and signed, and full legal and financial due diligence will begin.
Legal & Financial Due Diligence
Before formal due diligence starts, pharmacy owners can carry out internal checks to help speed up the process. These include:
Ensuring statutory books and records are fully up to date
Providing signed copies of employment contracts
Supplying copies of your Pharmaceutical Society of Ireland (“PSI”) Certificate and Health Service Executive (“HSE”) contract, for review by the buyer’s solicitor
Sharing any purchasing agreements with the pharmacy’s suppliers
Listing any lease or hire-purchase agreements for shop equipment (e.g. tills and prescription management systems)
Sharing your data protection policy demonstrating GDPR compliance
Providing current insurance schedules
Preparing an employee schedule, including pay rates and non-statutory employee entitlements
This list is not exhaustive, but preparing these documents in advance can make the due diligence stage smoother and faster for the seller.
Core Legal Documentation
If the transaction proceeds as a share sale, the core legal document will be the Share Purchase Agreement (“SPA”), which includes 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.
From the seller’s perspective, it’s important to:
Negotiate appropriate limits on liability
Undergo a thorough disclosure process with your solicitor
Ensure all relevant matters are recorded clearly in the Disclosure Letter
Review Property Arrangements
The buyer’s legal team will closely examine the pharmacy’s property arrangements, typically including:
Reviewing the lease
Checking planning documents
Confirming that no Deed of Renunciation has been signed (which could affect lease rights)
Even where a pharmacy operates under a lease, relevant planning permissions should still be on file. Identifying and organising these planning documents early on can help to avoid any subsequent delays.
Regulatory Compliance
A pharmacy’s PSI registration and HSE contract do not automatically transfer to a new owner. These will be terminated and will need to be renewed on completion of the sale.
It’s critical to liaise with both the PSI and the HSE in advance, to ensure a seamless handover.
Net Asset Valuation & Completion Process
In many pharmacy transactions, the parties agree on an estimated net asset value prior to closing, which is later finalised through a completion accounts process.
Key points to consider:
Sellers should obtain tax and financial advice ahead of completion to structure the transaction in a tax-efficient way
Any surplus net assets usually belong to the seller
The seller’s financial advisors typically prepare and negotiate the completion accounts post-sale
It is important to remember that surplus net assets belong to the seller and therefore considering advice in relation to structuring this payment is essential
Conclusion
Selling a pharmacy is a detailed process that requires careful consideration, from legal due diligence and financial preparation to regulatory compliance and a thorough property review.
With the right advice and forward planning, sellers can achieve a smooth, efficient sale that protects their interests and maximises the value of the business.
If you are considering selling your pharmacy, our expert Corporate & Commercial Team can guide you through each stage of the process.
Further Information
For advice on the sale of a Pharmacy or any related matter, please contact Gríana O’Kelly, Partner and Head of our Corporate & Commercial Team.
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