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AmerisourceBergen to Acquire PharMEDium for $2.575 Billion, Expands Company's Service Offerings for Health Systems

Oct 07, 2015 02:58 AM EDT | By Jean-Claude Arnobit
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AmerisourceBergen Corp., PharMEDium Healthcare Holdings Inc., acquisition
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AmerisourceBergen to Acquire PharMEDium for $2.575 Billion, Expands the Company's Service Offerings for Health Systems
(Photo : George Frey | Getty Images News)

AmerisourceBergen Corp. announced in a press release that it will be acquiring PharMEDium Healthcare Holdings, Inc. for $2.575 billion in cash from Clayton, Dubilier & Rice.

The acquisition will expand AmerisourceBergen's service offerings for health systems.

PharMEDium provides AmerisourceBergen access to its premier outsourced compounded sterile preparations (CSPs), according to the press release.

PharMEDium's CSPs provide quality standards in formulations that are not otherwise commercially available and meet specific hospital and physician clinical needs.

Steven H. Collis, the CEO of AmerisourceBergen, said in the press release that the transaction "strengthen the company's core business."

"PharMEDium's impressive track record of growth and proven ability to consistently deliver high-quality CSPs in key therapeutic areas make them the undisputed leader in an important growth area of the U.S. healthcare market," he said.

"PharMEDium is a compelling addition to our business, which allows us to provide differentiated offerings and further increases our ability to drive both value and efficiency for our health systems customers in a way that enhances patient safety and helps improve patient outcomes," Collis adds in the press release.

Reuters also reported that the compounding process is a process in which pharma products are diluted to create doses that are not sold commercially.

Demand for firms, who produce compounded products, like PharMEDium has increased following the increased regulatory oversight due to an outbreak of fungal meningitis at a compounding pharmacy in 2012.

Eric Coldwell, an analyst at Baird Equity Research, told Reuters that the acquisition of PharMEDium is good for AmerisourceBergen.

He said that PharMEDium brings the company "a complementary service line that is undergoing a growth renaissance." This is due to hospitals, which are "aggressively outsourcing compounded sterile needs."

Reuters stated that PharMEDium provides compounded intravenous and local anesthesia products to approximately 3,000 hospitals in the U.S.

AmerisourceBergen expects the acquisition to be $0.22 to $0.26 accretive to the company's adjusted earnings per share in fiscal 2016 on a net basis, according to the press release.

The company also expects the acquisition to generate about $30 million in synergies by fiscal 2018.

The transaction is expected to close in the first quarter of fiscal 2016, according to the press release.

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