AmerisourceBergen To Buy Wholesaler H. D. Smith For $815 Mln; Lifts FY18 View

(RTTNews) - AmerisourceBergen Corp. (ABC) on Monday announced that it has signed a definitive agreement to buy H. D. Smith, a healthcare products wholesaler in the U.S., for $815 million in cash.

The acquisition is expected to be slightly accretive to adjusted diluted earnings per share in fiscal year 2018, and to achieve full run-rate synergies and be approximately $0.15 accretive to the Company's adjusted EPS in fiscal year 2020.

Reflecting the estimated contribution of this acquisition, the pharmaceutical sourcing and distribution services company now expects revenue growth to be in the range of 8 percent to 11 percent, adjusted operating income growth to be in the range of 4 percent to 7 percent and Pharmaceutical Distribution Services segment operating income growth in the range of 4 percent to 7 percent.

In early November, the company announced that it expects fiscal 2018 revenue growth in the range of 7 percent to 9 percent, adjusted operating income growth in the range of 3 percent to 5 percent, and Pharmaceutical Distribution Services segment operating income growth in the range of 3 percent to 5 percent.

AmerisourceBergen further reaffirmed its fiscal 2018 forecast for adjusted earnings per share in the range of $5.90 to $6.15.

On average, 12 analysts polled by Thomson Reuters expect earnings of $6.07 per share for the quarter. Analysts' estimates typically exclude special items.

AmerisourceBergen said the transaction is subject to regulatory review and other closing conditions and is expected to close in early calendar 2018.

The company plans to fund the acquisition through the issuance of new long-term debt.

Steven Collis, Chairman, President and Chief Executive Officer of AmerisourceBergen, said, "The acquisition of H. D. Smith - a best-in-class private distributor with facilities across the country and a diversified customer base - strengthens our core business and expands and enhances our strategic scale in U.S. pharmaceutical distribution."

Citi acted as financial advisor to AmerisourceBergen. Morgan Stanley acted as financial advisor to H. D. Smith.