Catalyst Principal Partners, East Africa focused private equity firm, has sold its controlling stake in Kenya’s pharmaceutical retailer Goodlife Pharmacy to LeapFrog Investments.

The exit by Catalyst from Goodlife is the first made under the PE firm’s inaugural fund, Catalyst Fund I, a $125m private equity fund that invests in high growth mid-sized companies across Eastern Africa, including Tanzania, Ethiopia, Kenya, Uganda, Rwanda, Zambia and the Democratic Republic of Congo.

Leapfrog, a private equity investment company focusing on investments for emerging consumers in Africa and Asia, has acquired the majority stake for $22m.

The Goodlife investment follows LeapFrog’s 2014 investment of $18.7m in leading Kenyan health insurer Resolution Insurance.

Dr. Felix Olale and Michael Fernandes, Partners at LeapFrog, will serve as Global Co-Leads for health investments.

They will be supported by a team of eight specialists with deep healthcare investment expertise, and experience of African and Asian markets.

The Goodlife transaction was led by Dr. Olale who said that “the future of healthcare in emerging markets is about looking at a model that will endure for the 21st century”.

“At the center of this is a focus on consumer-centric and integrated healthcare. Goodlife’s business model delivers on this imperative. It is a pharmacy, a wellness outlet, a diagnostics center, and in the future will also be a place where you can access clinicians through telemedicine. This is a model that markets like East Africa are ripe for, particularly as we see a dramatic increase in chronic lifestyle diseases,” he said.

Catalyst, along with strategic partners Africa Chemist and Beauty Care and a seasoned management team, acquired a controlling stake in Mimosa Pharmacy in 2014, which it utilized as a platform to develop a leading branded pharmaceutical retail chain now re-branded to Goodlife Pharmacy. 

Goodlife has grown to be the largest pharmaceutical retail chain across eastern Africa consolidating health, personal care and beauty care in its products and service offering.

Co-founded by Dr. Josh Ruxin in Nairobi in 2013, the company has quickly grown to over 200 employees under the leadership of its CEO, Tony McNally.

The healthcare retailer offers globally recognized and quality brands to local consumers at affordable prices.

Goodlife also prides itself in being the first in the market to introduce consultation centres in all its locations and industry practices to alleviate the dispensing of substandard and counterfeit medication. 

During the period of Catalyst’s investment, Goodlife grew its footprint from six stores primarily located in Nairobi and the coastal region of Kenya, to 19 convenient locations that extend into emerging urban centers in Kenya and Uganda. 

Biniam Yohannes, Catalyst Managing Director, said: “Catalyst invested in a well-positioned local pharmacy chain that was benefiting from the rapidly growing healthcare, retail and consumer sectors. Catalyst worked with management and its co-investors to conceptualize, institutionalize and strengthen the company’s operations and to set strategic objectives to achieve rapid scaling to develop a differentiated health and beauty care retail offering to address an increasingly aspirational regional consumer. We are pleased with the success Goodlife has achieved over the past two years and are confident in the company’s trajectory to become a regional champion.” 

In 2015, Goodlife received financing from the International Finance Corporation (IFC) to accelerate its expansion plans.

Biju Mohandas, Head of IFC’s Health and Education practice, said: "IFC has been part of Goodlife’s growth story alongside Catalyst and looks forward to working closely with the new investor, management and other shareholders in their continuing endeavor to provide good quality, affordable pharmaceutical products to the East African consumer."

Goodwill’s co-founder Ruxin, added: “LeapFrog is not just a provider of capital. We also appreciate their healthcare expertise, and look forward to partnering closely with them to accelerate growth. This investment will benefit the people that really matter – our customers. The partnership will help us deliver high quality products to millions of people at affordable prices. Through Goodlife, we intend to transform healthcare delivery in Africa.”