Thursday 21 May 2015

Omnicare deal imminent?

Omnicare's shares spiked into the US close last night. I have been told the market will see a deal announcement soon regarding the US-listed pharmacy services company.

Indeed, in case you missed it, here is a Reuters piece on the topic. The news agency seems to think CVS Health Corp has won the auction:


Quellse Surprise - Omnicare has just announced the deal! The details are pasted below:

CVS Buys Drug-Benefits Provider for $10.4 Billion

Deal for Omnicare to boost pharmacy chain’s services for growing senior population

The purchase will boost CVS’s ability to dispense prescriptions in assisted-living and long-term care facilitiesENLARGE
The purchase will boost CVS’s ability to dispense prescriptions in assisted-living and long-term care facilities PHOTO: ASSOCIATED PRESS
CVS Health Corp. agreed to buy pharmacy-benefits provider Omnicare Inc. for $10.4 billion, in a move aimed at boosting the 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 is valued at $12.7 billion, when including $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 increase 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,” CVS Health Chief Executive Larry Merlo said 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. PBMs 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 Group Inc. agreed to acquire CatamaranCorp., 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.
Bloomberg on Wednesday had reported on the talks between CVS and Omnicare.
Write to Chelsey Dulaney at

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