AmerisourceBergen To Buy PharMEDium Healthcare For $2.575 Bln

(RTTNews) - Drug distributor AmerisourceBergen Corp. (ABC) said Tuesday that it has agreed to acquire PharMEDium Healthcare Holdings, Inc. from private equity firm Clayton, Dubilier & Rice for $2.575 billion in cash. The company noted that the acquisition will bolster its core business.

PharMEDium Healthcare is a privately-held provider of outsourced compounded sterile preparations or CSPs to acute care hospitals in the U.S.

The acquisition price is subject to certain adjustments and is on a cash-free, debt-free basis. The transaction is expected to close in the first quarter of fiscal 2016, which ends December 31, 2015.

PharMEDium provides CSPs that meet specific hospital and physician clinical needs as well as quality standards in formulations that are not otherwise commercially available. The CSPs are prepared in facilities that are inspected by the FDA and state board of pharmacy, using only FDA-approved sterile drugs in finished dosage form and FDA-cleared sterile containers.

PharMEDium maintains 4 compounding facilities, provides a broad range of 2,000 SKUs and serves over 3,000 hospital customers across all 50 states. The company will become a part of AmerisourceBergen Drug Corp.

Steven Collis, AmerisourceBergen President and Chief Executive Officer said, "PharMEDium is a compelling addition to our business, which allows us to provide differentiated offerings and further increases our ability to drive both value and efficiency for our health systems customers in a way that enhances patient safety and helps improve patient outcomes."

Valley Forge, Pennsylvania-based AmerisourceBergen expects the acquisition to be accretive to its fiscal 2016 adjusted earnings by $0.22 to $0.26 per share on a net basis, and generate about $30 million in synergies by fiscal 2018.

AmerisourceBergen noted that the acquisition was not contemplated in its previous guidance for adjusted earnings per share growth in fiscal 2016 in the low teens range on a percentage basis. Upon closing, the contribution from the acquisition will, therefore, be incremental to its previous expectations.

William Spalding, Chief Executive Officer of PharMEDium said, "We are confident in our ability to leverage the depth and breadth of the AmerisourceBergen organization to further enhance the efficiency and effectiveness of our hospital pharmacy CSP services and solutions."

For AmerisourceBergen, Morgan Stanley & Co. LLC acted as financial advisor, while Cravath, Swaine & Moore LLP provided legal counsel.

J.P. Morgan Securities LLC and Credit Suisse acted as financial advisors to PharMEDium, while Debevoise & Plimpton LLP as well as K&L Gates LLP provided legal counsel.

ABC closed Monday's trading at $94.99. In Tuesday's pre-market activity, the stock is up $0.57 or 0.60 percent to $95.56.