DOW JONES NEWSWIRES
Walgreen Co. (WAG) agreed to buy specialty and mail-service
pharmacy operations from BioScrip Inc. (BIOS) for $225 million, a
deal that will give the company expanded access to new and
limited-distribution drugs for HIV, cancer and organ
transplants
The deal nets Walgreen 30 specialty pharmacy locations in 16
states and the District of Columbia, mainly serving HIV, cancer and
transplant patients. Walgreen will also acquire parts of BioScrip's
centralized specialty pharmacy business and traditional mail
service pharmacy business, of which it is a customer through its
drugstore.com division.
The new businesses "create a strong network of support for our
core drugstore business to provide specialty pharmacy solutions to
our patients," Walgreens President and Chief Executive Greg Wasson
said in a statement.
Meanwhile, BioScrip plans to focus on its infusion pharmacy and
home health services.
The deal value includes $170 million in cash and BioScrip's
retention of $55 million in accounts receivable and working capital
liabilities. Walgreen may pay up to an additional $60 million based
on retention of certain business tied to the deal.
Walgreen said the deal will add "modestly" to earnings in the
2013 fiscal year.
The agreement comes as Walgreen continues to see steady sales
growth, but the drugstore chain reported in December its fiscal
first-quarter profit fell 4.5% on higher costs. Walgreen also faces
the prospect of customer losses after it left pharmacy-benefits
manager Express Scripts Inc.'s (ESRX) network following a contract
renewal dispute.
Walgreen shares closed Wednesday at $33.22 while BioScrip
finished at $5.84. Neither was active in recent premarket
trading.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com