Combined Company Becomes Fourth Largest Pharmacy Benefits Manager
July 2, 2012
/PRNewswire/ - SXC Health Solutions Corp. (NASDAQ: SXCI) (TSX: SXC), a leading provider of pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefits management industry, announces that it has completed its previously disclosed merger of Catalyst Health Solutions, Inc. with a wholly-owned subsidiary of SXC. The merger was effective today following overwhelming approval by SXC and Catalyst stockholders at special meetings held this morning.
The transaction creates the fourth largest PBM by prescription volume, with an annual prescription volume of more than 200 million adjusted PBM scripts. With combined annual revenues of approximately
, the combined company is expected to cover approximately 25 million members. SXC will update its 2012 guidance to account for the completion of the Catalyst merger in its second quarter 2012 earnings release.
"The combination of SXC and Catalyst merges two highly successful, fast-growing enterprises to deliver the resources, skill and scale to solve the healthcare cost challenge," said
, Chairman and CEO of SXC. "The combined company provides the leading alternative to the traditional approach of other PBMs through its purchasing power, coupled with a flexible, agile, client-centered delivery model. Together, we are able to chart a new course to deliver distinct advantages to all stakeholders."
Under the terms of the merger agreement, Catalyst stockholders will receive
in cash and 0.6606 of a share of SXC stock for each Catalyst share.
As previously announced, the transaction is expected to be accretive to SXC's non-GAAP earnings in 2013, which excludes transaction-related amortization expected to be approximately
in the first twelve months after closing. The combined company expects to achieve approximately
of annual cost synergies over the next 18 to 24 months through improved scale and operating leverage.
Board of Directors
SXC also announced today that two new directors,
Harry M. Kraemer, Jr.
Steven B. Epstein
, will join the SXC board following the completion of the transaction. Mr. Epstein's appointment will become effective in
Curtis J. Thorne
Philip R. Reddon
have tendered their resignations as SXC directors, effective immediately. "
have been integral members of our Board of Directors as we have grown from a healthcare IT company into a leader in the PBM industry," said Mr.
, Chairman and CEO of SXC. "On behalf of the company, I would like to thank Curt and Phil for their contribution, strategic counsel and leadership and years of service to SXC."
Ranked number one on the 2011
Fortune 100 List of Fastest Growing Companies
, SXC Health Solutions Corp. is a leading provider of pharmacy benefits management (PBM) services and Health Care Information Technology (HCIT) solutions to the healthcare benefits management industry. SXC's product offerings and solutions combine a wide range of PBM services and software applications, application service provider (ASP) processing services and professional services, designed for many of the largest organizations in the pharmaceutical supply chain, such as health plans, employers, federal, provincial, and state and local governments, pharmacy benefit managers and other healthcare intermediaries. SXC is headquartered in
, with multiple locations in the U.S. and
. For more information please visit
SXC Forward-Looking Statements
Certain statements included in this communication, including those that express management's expectations or estimates of SXC's or the combined company's future performance, constitute "forward- looking statements" within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. SXC cautions that such forward-looking statements involve known and unknown risks, uncertainties and other risks that may cause SXC's actual financial results, performance, or achievements to be materially different from SXC's estimated future results, performance or achievements expressed or implied by those forward-looking statements. Numerous factors could cause actual results to differ materially from those in the forward-looking statements, including without limitation, SXC's ability to achieve increased market acceptance for SXC's product offerings and penetrate new markets; consolidation in the healthcare industry; the existence of undetected errors or similar problems in SXC's software products; SXC's ability to identify and complete acquisitions, manage SXC's growth and integrate acquisitions, including the risk that the SXC and Catalyst businesses will not be integrated successfully; the possibility that the expected efficiencies and cost savings from the Catalyst merger will not be realized, or will not be realized within the expected time period; SXC's ability to compete successfully; potential liability for the use of incorrect or incomplete data; the length of the sales cycle for SXC's healthcare software solutions; interruption of SXC's operations due to outside sources; disruption from the Catalyst merger making it more difficult to maintain business and operational relationships; the risk of customer attrition; maintaining SXC's intellectual property rights and litigation involving intellectual property rights; SXC's ability to obtain, use or successfully integrate third-party licensed technology; compliance with existing laws, regulations and industry initiatives and future change in laws or regulations in the healthcare industry; breach of SXC's security by third parties; SXC's dependence on the expertise of SXC's key personnel; SXC's access to sufficient capital to fund SXC's future requirements; and potential write-offs of goodwill or other intangible assets. This list is not exhaustive of the factors that may affect any of SXC's forward-looking statements. Other factors that should be considered are discussed from time to time in SXC's filings with the U.S. Securities and Exchange Commission (the "SEC"), including the risks and uncertainties discussed under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in SXC's 2011 Annual Report on Form 10-K and subsequent Form 10-Qs, which are available at
. Investors are cautioned not to put undue reliance on forward- looking statements. All subsequent written and oral forward-looking statements attributable to SXC or persons acting on SXC's behalf are expressly qualified in their entirety by this cautionary statement. SXC disclaims any intent or obligation to update publicly these forward- looking statements, whether as a result of new information, future events or otherwise.
Certain of the assumptions made in preparing forward-looking information and management's expectations include: maintenance of SXC's existing customers and contracts, SXC's ability to market SXC's products successfully to anticipated customers, the impact of increasing competition, the growth of prescription drug utilization rates at predicted levels, the retention of SXC's key personnel, SXC's customers continuing to process transactions at historical levels, that SXC's systems will not be interrupted for any significant period of time, that SXC's products will perform free of major errors, SXC's ability to obtain financing on acceptable terms and that there will be no significant changes in the regulation of SXC's business.
SOURCE SXC Health Solutions Corp.