NEW YORK (TheStreet) -- Shares of AmerisourceBergen (ABC) - Get Report are down by 0.3% to $92.75 in mid-morning trading on Wednesday, after the company announced plans to buy hospital product supplier PharMEDium for $2.58 billion.

The Chesterbrook, PA-based pharmaceutical sourcing and distributions service said that the purchase would add between 22 cents and 26 cents to its adjusted EPS in 2016.

Additionally, the acquisition is expected to cut costs by about $30 million annually by 2018.

AmerisourceBergen purchased the privately held company from private equity firm Clayton, Dubilier & Rice.

The firm acquired PharMEDium in 2014 with unconfirmed reports valuing the deal at about $900 million.

PharMEDium had filed for a $100 million IPO in August.

This is the second major acquisition for AmerisourceBergen this year after the company purchased MWI Veterinary for $2.5 billion in January in an effort to expand into animal health, according to Reuters.

Separately, TheStreet Ratings team rates AMERISOURCEBERGEN CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate AMERISOURCEBERGEN CORP (ABC) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance, increase in net income and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ABC's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 12.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 1775.8% when compared to the same quarter one year prior, rising from -$12.78 million to $214.16 million.
  • Net operating cash flow has significantly increased by 115.75% to $1,121.58 million when compared to the same quarter last year. In addition, AMERISOURCEBERGEN CORP has also vastly surpassed the industry average cash flow growth rate of 13.96%.
  • AMERISOURCEBERGEN CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERISOURCEBERGEN CORP reported lower earnings of $1.20 versus $2.10 in the prior year. This year, the market expects an improvement in earnings ($4.97 versus $1.20).
  • You can view the full analysis from the report here: ABC