Boots Healthcare sale puts £14m advertising into play

Agencies handling Boots’ healthcare brands Clearasil, Nurofen, Optrex and Strepsils have been put on alert following the retailer’s decision to sell Boots Healthcare International (BHI).

In the UK the business spends about &£13.7m on advertising. McCann Erickson handles advertising for all the brands, while MindShare is understood to handle the bulk of the media buying.

Pfizer, Johnson & Johnson and GlaxoSmithKline have all been touted as possible buyers of BHI. However, McCann is a roster agency for each of these businesses and MindShare also handles work for Pfizer.

There is also speculation about a management buy-out for BHI, and bids from private equity firms including a consortium reportedly led by former Boots marketing chief and head of BHI Barry Clare.

Boots is expecting to sell the business by the end of its financial year next March for an estimated &£1bn to &£1.25bn. BHI is entering the final year of a four-year growth strategy, which boosted profits from &£50m to &£80m a year. The business will require significant investment if it is to maintain this growth in the future.

Boots chief executive Richard Baker is focusing his attentions on the retail business and has decided that market conditions are right to sell BHI to achieve maximum value for shareholders. The announcement to sell BHI last week coincided with a profits warning from Boots – its second in five weeks.

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