By Chelsey Dulaney
CVS Health Corp. has agreed to buy pharmacy-benefits provider
Omnicare Inc. drugstore chain's services for the growing senior
patient population.
The offer for $98 a share in cash is a 3.6% premium to
Omnicare's closing price on Wednesday. The total deal value
includes $2.3 billion in debt.
Shares of CVS gained 1.9% in premarket trading, while Omnicare's
shares gained 1%.
CVS said the deal will significantly boost its ability to
dispense prescriptions in assisted-living and long-term-care
facilities.
"The acquisition of Omnicare significantly expands our business,
providing CVS Health access into a new pharmacy dispensing
channel," said CVS Health Chief Executive Larry Merlo in a news
release.
CVS expects the deal will add 20 cents to its adjusted per-share
earnings next year and become increasingly accretive after that.
CVS also said it expects to see revenue synergies.
The deal, subject to regulatory approval, is expected to close
near the end of the year.
The deal is the latest in a string of acquisitions of
pharmacy-benefit managers, or PBMs. PMBs negotiate for medicines on
behalf of employers and health plans. They have placed pressure on
drugstores by negotiating for lower prices on behalf of their
clients and via mail-order plans that compete for prescription
business.
In March, UnitedHealth agreed to acquire Catamaran, the
fourth-largest pharmacy-benefit manager in the U.S. by volume of
prescriptions processed, for $12.8 billion in cash. The deal was
seen helping UnitedHealth to bulk up its pharmacy-benefit business
amid growing concern from employers and insurers about the rising
costs of cutting-edge drugs.
In February, Rite Aid Corp. agreed to buy pharmacy-benefit
manager Envision Pharmaceutical Services for about $2 billion from
investment firm TPG.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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