Five Star Quality Care, Inc. (NYSE: FVE) today announced that it has completed its previously announced sale of its pharmacy business to Omnicare, Inc.
Five Star received $30.5 million in sale proceeds from Omnicare. In addition, Five Star sold to Omnicare, or retained, certain items of net working capital invested in its pharmacy business which, based on June 30, 2012 amounts, is approximately $8.2 million. Accordingly, Five Star currently expects to receive a total of $38.7 million (before transaction costs) in net cash receipts resulting from the sale and to record a capital gain of approximately $23.3 million.
The pharmacy business that Five Star sold includes eight licensed pharmacies operating in 13 states that provide institutional pharmacy services to 247 senior living communities with approximately 12,300 living units.
Five Star Quality Care, Inc. is a senior living and healthcare services company headquartered in Newton, MA.WARNING REGARDING FORWARD LOOKING STATEMENTS THIS PRESS RELEASE INCLUDES FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE BASED UPON FIVE STAR'S CURRENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS REASONS, INCLUDING SOME REASONS BEYOND FIVE STAR'S CONTROL. FOR EXAMPLE:
- THIS PRESS RELEASE STATES THAT FIVE STAR EXPECTS TO RECEIVE A TOTAL OF $38.7 MILLION (BEFORE TRANSACTION COSTS) IN NET CASH RECEIPTS RESULTING FROM THE SALE. THESE EXPECTED NET CASH RECEIPTS INCLUDE ACCOUNTS RECEIVABLE THAT FIVE STAR RETAINED. FURTHER, THE SALE AGREEMENT INCLUDES CUSTOMARY INDEMNIFICATION OBLIGATIONS AND REQUIRES FIVE STAR TO ESCROW A PORTION OF THE PURCHASE PRICE IN CONNECTION WITH THOSE INDEMNIFICATION OBLIGATIONS. IF FIVE STAR IS UNABLE TO COLLECT ACCOUNTS RECEIVABLE THAT IT HAS RETAINED OR IS REQUIRED TO PAY AMOUNTS (INCLUDING WITH ESCROWED PROCEEDS) IN THE FUTURE IN SATISFACTION OF THOSE OBLIGATIONS, THE ACTUAL NET CASH RECEIPTS FIVE STAR MAY REALIZE FROM THE SALE, AND ANY CORRESPONDING CAPITAL GAIN, MAY BE REDUCED.
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