BioScrip Sells Assets Of Specialty Pharmacies And Centralized Specialty And Mail Service Pharmacy To Walgreens
BioScrip, Inc. (NASDAQ: BIOS) (the “Company”) today announced that it
has signed a definitive agreement to sell certain assets of its
community specialty pharmacies and centralized specialty and mail
BioScrip, Inc. (NASDAQ: BIOS) (the “Company”) today announced that it has signed a definitive agreement to sell certain assets of its community specialty pharmacies and centralized specialty and mail service pharmacy businesses (the “Transferred Businesses”) to Walgreens Co. (NYSE, NASDAQ: WAG), for a total deal value of approximately $225 million. This includes approximately $170 million in cash at closing and retention by BioScrip of associated accounts receivable and working capital liabilities of approximately $55 million, based on BioScrip’s balance sheet values at December 31, 2011. Up to an additional $60 million in purchase price may be payable based on events related directly or indirectly to Walgreens retention of certain business included in the Transferred Businesses. For the nine-months ending September 30, 2011, the Transferred Businesses realized net revenues of $938.5 million and gross profit of $73.7 million, or 7.9 percent of sales. The Company will use the proceeds from the sale to focus on and expand its infusion pharmacy footprint to better serve its national customers, execute on strategic growth opportunities and pay down debt. BioScrip expects this transaction will be accretive to its earnings in 2012. “This transaction resulted from the work accomplished through the strategic assessment that we commenced in early 2011. Consistent with our goal to shift corporate resources to areas of maximum return on investment and long-term growth potential, this important step allows us to concentrate our focus on a market segment in which we have meaningful strengths and distinct competitive advantages. Additionally, the divestiture enables us to remove corporate overhead related to our legacy business,” said Rick Smith, President and Chief Executive Officer of BioScrip. This transaction better positions BioScrip to meet the needs of the rapidly changing healthcare industry. More healthcare services are projected to be provided in the home or at alternate sites of administration, which is in line with BioScrip’s patient service model for its infusion and home health business. Favorable demographic trends including aging of the U.S. population, which is driving the demand for at home care, and the need for cost containment and to reduce hospital re-admission rates, all favor growth in the Infusion/Home Health industry. According to the National Home Infusion Association (NHIA), the alternate-site infusion therapy sector continues to expand and is currently estimated to represent between approximately $9 and $11 billion per year in U.S. health care expenditures serviced by 700 to 1,000 infusion pharmacies. The fragmented nature of the Infusion/Home Health industry also creates opportunity for growth both organically and through acquisition.