WOONSOCKET, R.I. and CINCINNATI, May 21,
2015 /PRNewswire/ -- CVS Health Corporation (NYSE:CVS) and
Omnicare, Inc. (NYSE:OCR) announced today that they have entered
into a definitive agreement for CVS Health to acquire Omnicare, the
leading provider of pharmacy services to long term care facilities,
for $98.00 per share in cash, for a
total enterprise value of approximately $12.7 billion, which includes approximately
$2.3 billion in debt. In total,
Omnicare has approximately 13,000 employees at 160 locations in 47
states across the U.S.
With the acquisition of Omnicare, CVS Health will significantly
expand its ability to dispense prescriptions in assisted living and
long term care facilities, serving the senior patient
population. CVS Health will also expand its presence in the
rapidly growing specialty pharmacy business. Omnicare's
complementary specialty pharmacy platform and clinical expertise
will augment CVS Health's capabilities and enable CVS Health to
continue to provide innovative and cost-effective solutions to
patients and payors.
The boards of directors of both companies have approved the
transaction, which is subject to approval by the holders of
Omnicare's common stock, as well as other customary closing
conditions, including applicable regulatory approvals. The
transaction is expected to close near the end of 2015.
CVS Health expects to achieve significant purchasing and revenue
synergies as well as operating efficiencies from this combination.
The company expects the transaction to be approximately
20 cents accretive to Adjusted EPS in
2016, its first full year, excluding integration and any one-time
transaction costs. It is expected to become increasingly accretive
to Adjusted EPS in subsequent years. The company has secured
$13 billion in fully committed
unsecured bridge financing from Barclays and expects to put in
place permanent financing in the form of senior notes and/or term
loans prior to the closing of the transaction. CVS Health
expects that it will continue to have a solid balance sheet and,
with its strong free cash flow, is committed to returning to its
targeted leverage ratio of 2.7 times adjusted debt-to-EBITDA.
"The acquisition of Omnicare significantly expands our business,
providing CVS Health access into a new pharmacy dispensing
channel," said CVS Health President and CEO Larry Merlo. "It also creates new opportunities
for us to extend our high-quality, innovative pharmacy programs to
a broader population of seniors and chronic care patients as they
transition across the care continuum. We have been impressed by the
Omnicare team and what they have created for the patients they
serve."
"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," said Omnicare President and CEO Nitin Sahney. "This exciting combination is the
result of a broad and thorough review of our strategic options. On
behalf of the Omnicare team, I'd like to thank our 13,000 employees
whose hard work and dedication has enabled Omnicare to become a
recognized leader in pharmacy services."
Given the aging U.S. population, long term care is a growth
segment of the health care system. More people are expected to use
assisted living facilities and independent living communities in
the coming decades, creating a substantial growth opportunity for
those companies serving the health care needs of seniors.
In entering this new customer distribution channel, CVS Health
will deliver meaningful benefits to consumers, patients,
caregivers, and payors by providing highly coordinated clinical
pharmacy care across multiple treatment settings from retail to
long term care. CVS Health will help improve patient outcomes and
provide enhanced continuity of care to patients and caregivers as
they transition through the health care system.
CVS Health received investment banking and financial advice from
Barclays and Evercore. The company was advised on transaction legal
matters by Sullivan & Cromwell LLP and on antitrust matters by
Dechert LLP.
BofA Merrill Lynch and Centerview Partners are serving as
financial advisors to Omnicare. White & Case LLP is
serving as Omnicare's legal counsel.
Teleconference and Webcast
CVS Health will be holding a conference call today for the
investment community at 8:30 am (EDT)
to discuss the transaction. The dial-in number for the call is
800-750-5849 or, for international callers, 212-231-2921. An
audio webcast of the call will be broadcast simultaneously on CVS
Health's website for all interested parties. To access the
webcast, please visit the investor relations section of the
company's website at http://investors.cvshealth.com/. A
replay of the call will be available from approximately
10:30 am (EDT) on May 21 through 10:30 am
(EDT) on May 28. It can be accessed by dialing
800-633-8284 or, for international callers, 402-977-9140, and
entering access code 21769309. The webcast will be archived
and available on the CVS Health website for a one-year period
following the conference call.
About CVS Health
CVS Health (NYSE: CVS) is a pharmacy
innovation company helping people on their path to better
health. Through its 7,800 retail drugstores, nearly 1,000
walk-in medical clinics, a leading pharmacy benefits manager with
more than 70 million plan members, and expanding specialty pharmacy
services, the Company enables people, businesses and communities to
manage health in more affordable, effective ways. This unique
integrated model increases access to quality care, delivers better
health outcomes and lowers overall health care costs. Find
more information about how CVS Health is shaping the future of
health at www.cvshealth.com.
About Omnicare
Omnicare, Inc., a Fortune 500 company
based in Cincinnati, Ohio,
provides comprehensive pharmaceutical services to patients and
providers across the United
States. As the market-leader in professional pharmacy,
related consulting and data management services for skilled
nursing, assisted living and other chronic care institutions,
Omnicare leverages its unparalleled clinical insight into the
geriatric market along with some of the industry's most innovative
technological capabilities to the benefit of its long-term care
customers. Omnicare also provides specialty pharmacy and key
commercialization services for the bio-pharmaceutical industry
through its Specialty Care Group. For more information, visit
www.omnicare.com.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this press release may
constitute "forward-looking statements" within the meaning of the
federal securities laws. By their nature, all forward-looking
statements involve risks and uncertainties. Actual results
may differ materially from those contemplated by the
forward-looking statements for a number of reasons as described in
our Securities and Exchange Commission filings, including those set
forth in the Risk Factors section and under the section entitled
"Cautionary Statement Concerning Forward-Looking Statements" in our
most recently filed Annual Report on Form 10-K and Quarterly Report
on Form 10-Q. These forward-looking statements may be identified by
words such as 'believes', 'expects', 'anticipates', 'projects',
'intends', 'should', 'seeks', 'estimates', 'future' or similar
expressions or by discussion of, among other things, strategy,
goals, plans or intentions. The factors that could cause actual
results to differ materially include the following: the possibility
that the anticipated synergies and other benefits from the proposed
acquisition of Omnicare by CVS Health will not be realized, or will
not be realized within the expected time periods; the inability to
obtain regulatory approvals of the proposed acquisition (including
the approval of antitrust authorities necessary to complete the
transaction) on the terms desired or anticipated; the timing of
such approvals and the risk that such approvals may result in the
imposition of conditions that could adversely affect the combined
company or the expected benefits of the transaction; the risk that
a condition to closing the transaction may not be satisfied on a
timely basis or at all; the risk that the proposed transaction
fails to close for any other reason; the risks and uncertainties
related to CVS Health's ability to successfully integrate the
operations, products and employees of Omnicare; the effect of the
potential disruption of management's attention from ongoing
business operations due to the pending acquisition; the effect of
the announcement of the proposed transaction on CVS Health's and
Omnicare's relationships with their respective customers, vendors
and lenders and on their respective operating results and
businesses generally; access to available financing on a timely
basis and on reasonable terms; the outcome of any legal proceedings
related to the proposed acquisition; and the risks and
uncertainties normally incidental to the respective businesses of
CVS Health and Omnicare. Additional information concerning these
and other risks and uncertainties can be found in CVS Health's and
Omnicare's periodic reports filed with the U.S. Securities and
Exchange Commission (the "SEC"). Copies of these filings, as well
as subsequent filings, are available online at www.sec.gov,
www.cvshealth.com, www.omnicare.com or on request from CVS Health
or Omnicare, as applicable. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. Except as otherwise required by law,
neither CVS Health nor Omnicare undertakes any obligation to
publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Additional Information and Where to Find It
This
communication may be deemed to be solicitation material in respect
of the proposed acquisition of Omnicare, Inc. by CVS Pharmacy,
Inc., a wholly owned subsidiary of CVS Health Corporation. In
connection with the proposed acquisition, CVS Health and Omnicare
intend to file relevant materials with the SEC, including
Omnicare's proxy statement on Schedule 14A. INVESTORS AND
STOCKHOLDERS OF OMNICARE ARE ADVISED TO READ ALL RELEVANT DOCUMENTS
FILED WITH THE SEC, INCLUDING OMNICARE'S PROXY STATEMENT WHEN IT
BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS
WITH RESPECT TO THE PROPOSED ACQUISITION BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain the proxy statement (when
available) and other relevant documents free of charge at the SEC's
web site, http://www.sec.gov, and Omnicare stockholders will
receive information at an appropriate time on how to obtain
transaction-related documents for free from Omnicare.
Participants in Solicitation
CVS Health and its
directors and executive officers, and Omnicare and its directors
and executive officers, may be deemed to be participants in the
solicitation of proxies from the holders of Omnicare common stock
in connection with the proposed acquisition. Information about the
directors and executive officers of CVS Health is set forth in the
proxy statement for CVS Health's 2015 Annual Meeting of
Stockholders, which was filed with the SEC on March 27, 2015. Information about the directors
and executive officers of Omnicare is set forth in the proxy
statement for Omnicare's 2015 Annual Meeting of Stockholders, which
was filed with the SEC on April 17,
2015. Additional information regarding potential
participants in such proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be included in the proxy statement and other relevant
materials filed by Omnicare with the SEC in connection with the
proposed acquisition when they become available.
Contacts:
For CVS Health:
Nancy
Christal
Senior Vice President
Investor Relations
(914) 722-4704
Carolyn Castel
Vice President
Corporate Communications
(401) 770-5717
Carolyn.Castel@CVSHealth.com
For Omnicare:
Patrick
Lee
Senior Vice President
Investor Relations
(513) 719-1507
patrick.lee@omnicare.com
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SOURCE CVS Health Corporation