NEW YORK (TheStreet) -- Shares of healthcare services company Omnicare Inc. (OCR) are up by 1.33% to $95.89 in pre-market trading on Thursday, after pharmacy and healthcare retailer CVS Heath (CVS) announced that it has agreed to acquire Omnicare for $98 per share in cash, for a total enterprise value of approximately $12.7 billion.
The acquisition allows CVS to "significantly expand" its ability to distribute prescriptions in facilities offering assisted living and long term care. CVS stock is up by 0.66% to $101.94 in pre-market trading.
The board of both companies have approved the merger, which still needs endorsement from Omnicare's stockholders. The deal is expected to close at the end of the year, pending regulatory authorization.
"We are pleased to have reached this agreement with CVS Health, one of the leading companies in the health care industry, which we believe will allow us to accelerate our mission of enhancing the quality and cost-effectiveness of care for complex patient populations," Omnicare CEO Nitin Sahney said in a statement.
Separately, TheStreet Ratings team rates OMNICARE INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate OMNICARE INC (OCR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins."