CVS Said in Advanced Talks to Buy Omnicare in Pharmacy Expansion
2015-05-20 21:59:20.969 GMT
By Ed Hammond, Jeffrey McCracken and Manuel Baigorri
(Bloomberg) -- CVS Health Corp., the biggest U.S. retailer
of prescription drugs, is in advanced talks to acquire nursing-
home pharmacy Omnicare Inc., people with knowledge of the matter
said.
A deal could be reached as soon as this week, the people
said, asking not to be identified discussing private
information. Omnicare, with a market value of about $9.2
billion, hired advisers to explore a sale earlier this year.
The companies are still finalizing the terms of the deal,
and no agreement is certain, the people said. Representatives
for Omnicare and CVS didn’t immediately reply to e-mail and
phone calls seeking comment.
Omnicare delivers drugs and helps senior-living facilities
manage residents’ medications. CVS is the nation’s second-
largest pharmacy benefits manager, handling drug plans for
health insurers and employers. In its most recent quarter growth
in sales from that business far outpaced the company’s retail
division.
Both CVS and Omnicare are big in Medicare Part D, a federal
program that subsidizes medicine for retirees, Charles Rhyee, a
New York-based analyst for Cowen Group Inc., said in an
interview last month. Omnicare also drew interest from industry
leader Express Scripts Holding Co., people with knowledge of the
matter said last month.
Rising Demand
Demand for pharmacy services is rising as patients,
insurers and companies look for ways to manage costs with drug
prices increasing. Pharmacy-services providers are combining to
gain a bigger piece of the growing market.
UnitedHealth Group Inc. said in March that it would buy
Catamaran Corp. in a $12.8 billion deal to create a large third-
place competitor. That deal came on the heels of Rite Aid
Corp.’s agreement to buy pharmacy benefits manager EnvisionRx
for about $2 billion.
Express Scripts became the biggest pharmacy-benefits
management company after purchasing Medco Health Solutions Inc.
three years ago for $34 billion including net debt.
For Related News and Information:
Omnicare Said to Draw Interest From CVS and Express Scripts
Omnicare at Almost $10 Billion Still Worth It for CVS: Real M&A
Top Stories:TOP<GO>
--With assistance from Tara Lachapelle in New York.
To contact the reporters on this story:
Ed Hammond in New York at +1-212-617-1963 or
ehammond12@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net;
Manuel Baigorri in London at +44-20-3525-4457 or
mbaigorri@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net
Elizabeth Wollman
2015-05-20 21:59:20.969 GMT
By Ed Hammond, Jeffrey McCracken and Manuel Baigorri
(Bloomberg) -- CVS Health Corp., the biggest U.S. retailer
of prescription drugs, is in advanced talks to acquire nursing-
home pharmacy Omnicare Inc., people with knowledge of the matter
said.
A deal could be reached as soon as this week, the people
said, asking not to be identified discussing private
information. Omnicare, with a market value of about $9.2
billion, hired advisers to explore a sale earlier this year.
The companies are still finalizing the terms of the deal,
and no agreement is certain, the people said. Representatives
for Omnicare and CVS didn’t immediately reply to e-mail and
phone calls seeking comment.
Omnicare delivers drugs and helps senior-living facilities
manage residents’ medications. CVS is the nation’s second-
largest pharmacy benefits manager, handling drug plans for
health insurers and employers. In its most recent quarter growth
in sales from that business far outpaced the company’s retail
division.
Both CVS and Omnicare are big in Medicare Part D, a federal
program that subsidizes medicine for retirees, Charles Rhyee, a
New York-based analyst for Cowen Group Inc., said in an
interview last month. Omnicare also drew interest from industry
leader Express Scripts Holding Co., people with knowledge of the
matter said last month.
Rising Demand
Demand for pharmacy services is rising as patients,
insurers and companies look for ways to manage costs with drug
prices increasing. Pharmacy-services providers are combining to
gain a bigger piece of the growing market.
UnitedHealth Group Inc. said in March that it would buy
Catamaran Corp. in a $12.8 billion deal to create a large third-
place competitor. That deal came on the heels of Rite Aid
Corp.’s agreement to buy pharmacy benefits manager EnvisionRx
for about $2 billion.
Express Scripts became the biggest pharmacy-benefits
management company after purchasing Medco Health Solutions Inc.
three years ago for $34 billion including net debt.
For Related News and Information:
Omnicare Said to Draw Interest From CVS and Express Scripts
Omnicare at Almost $10 Billion Still Worth It for CVS: Real M&A
Top Stories:TOP<GO>
--With assistance from Tara Lachapelle in New York.
To contact the reporters on this story:
Ed Hammond in New York at +1-212-617-1963 or
ehammond12@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net;
Manuel Baigorri in London at +44-20-3525-4457 or
mbaigorri@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net
Elizabeth Wollman