The highly successful Chemist Warehouse empire emerged from humble beginnings before its owners were made billionaires in a recent merger with the company’s supplier.
Mario Verrocchi met brothers Jack and Sam Gance in the northern Melbourne suburb of Reservoir after graduating from the University of South Australia with a pharmacy degree.
The Gances bought their first chemist in Reservoir in 1972, and another one 300m away three years later in an area that was brimming with European migrants.
Mr Verrocchi said a ‘beautiful relationship’ was forged between the men, who have all become billionaires after confirmation on Monday of Chemist Warehouse executing a reverse takeover of ASX-listed Sigma in a massive deal.
Co-founder of retail giant Chemist warehouse Mario Verrocchi (right) has detailed the company’s humble beginnings in Melbourne’s northern suburbs
Chemist warehouse has more than 600 stores in Australia, New Zealand, Ireland and China
With an estimated $8.8billion market capitalisation, the combined company would be among Australia’s 100 biggest and easily eligible for the ASX200.
Mr Verrocchi found it hard to land his first job until he was asked by Sam if he could speak Italian, to which he replied ‘yes’.
‘And he said you might be my boy (trainee). He then said no, but then he rang me back later and said yes,’ he told The Australian.
‘That started what has been a lovely relationship from then on.’
Chemist Warehouse Group now boasts almost $7.9billion in annual sales across more than 600 stores in Australia, New Zealand, Ireland and China.
The Verrocchi and Gance families will emerge from the Sigma deal with a combined $5billion in cash and shares.
Chemist Warehouse shareholders will own 85.75 per cent of the merged company, a deal that will be subject to approval from the Australian Competition and Consumer Commission.
Sam Gance (right) has been made into a billionaire after Chemist warehouse merged with its supplier Sigma on Monday
Mr Verrocchi and the Gance brothers will hold about 49 per cent of the combined entity’s shares.
It is understood Mr Verrocchi’s stake will be worth almost $2billion, and the two Gance siblings will have about $2.3billion worth of shares.
When asked if he was ready for public scrutiny in a listed entity Mr Verrocchi replied: ‘No!’.
‘The truth is it’s just not who I am, and Jack [Gance] is pretty much the same. We spent 50 years heads down, bum up, doing what we needed to do,’ he said.
Having access to public market capital will help Chemist Warehouse’s future growth and Mr Verrocchi believes there’s still more room for expansion in Australia in both bricks-and-mortar stores and online.
Mr Verrocchi said succession planning could also be part of the strategy in going public, although the families planned on staying in the business long-term.
Jack Gance (pictured) will have a stake in $2.3billion worth of shares with his brother Sam
‘I’ve been doing this for a long time, and I’m getting towards the end of my time,’ he said.
‘If you’re a responsible CEO or founder, you have to create the next thing and the people who have followed you are at a time of their lives in their 40s or 50s where they can leave a pathway for the next people.
‘But just when you think that everything is finished, you realise it is just the beginning. And that’s a bit like that here.’
The merger with Sigma is expected to be completed in the second half of 2024, pending regulatory approvals.