Furthers Strategy to Become More Focused Company and Expand Infusion
Footprint
ELMSFORD, N.Y.--(BUSINESS WIRE)--Feb. 2, 2012--
BioScrip, Inc. (NASDAQ: BIOS) (the “Company”) today announced that it
has signed a definitive agreement to sell certain assets of its
community specialty pharmacies and centralized specialty and mail
service pharmacy businesses (the “Transferred Businesses”) to Walgreens
Co. (NYSE, NASDAQ: WAG), for a total deal value of approximately $225
million. This includes approximately $170 million in cash at closing and
retention by BioScrip of associated accounts receivable and working
capital liabilities of approximately $55 million, based on BioScrip’s
balance sheet values at December 31, 2011. Up to an additional $60
million in purchase price may be payable based on events related
directly or indirectly to Walgreens retention of certain business
included in the Transferred Businesses. For the nine-months ending
September 30, 2011, the Transferred Businesses realized net revenues of
$938.5 million and gross profit of $73.7 million, or 7.9 percent of
sales. The Company will use the proceeds from the sale to focus on and
expand its infusion pharmacy footprint to better serve its national
customers, execute on strategic growth opportunities and pay down debt.
BioScrip expects this transaction will be accretive to its earnings in
2012.
“This transaction resulted from the work accomplished through the
strategic assessment that we commenced in early 2011. Consistent with
our goal to shift corporate resources to areas of maximum return on
investment and long-term growth potential, this important step allows us
to concentrate our focus on a market segment in which we have meaningful
strengths and distinct competitive advantages. Additionally, the
divestiture enables us to remove corporate overhead related to our
legacy business,” said Rick Smith, President and Chief Executive Officer
of BioScrip.
This transaction better positions BioScrip to meet the needs of the
rapidly changing healthcare industry. More healthcare services are
projected to be provided in the home or at alternate sites of
administration, which is in line with BioScrip’s patient service model
for its infusion and home health business. Favorable demographic trends
including aging of the U.S. population, which is driving the demand for
at home care, and the need for cost containment and to reduce hospital
re-admission rates, all favor growth in the Infusion/Home Health
industry. According to the National Home Infusion Association (NHIA),
the alternate-site infusion therapy sector continues to expand and is
currently estimated to represent between approximately $9 and $11
billion per year in U.S. health care expenditures serviced by 700 to
1,000 infusion pharmacies. The fragmented nature of the Infusion/Home
Health industry also creates opportunity for growth both organically and
through acquisition.
The transaction is structured as an asset acquisition, with a planned
transfer of servicing for the central specialty pharmacy and mail
service pharmacy businesses (including all contract rights related to
the drugstore.com business) to existing Walgreens facilities. Following
the close of the transaction, BioScrip will maintain its infusion, home
health, pharmacy benefit management and cash card businesses, and will
continue to service its infusion patient base and managed care customers
through existing BioScrip pharmacies.
Mr. Smith concluded, “We are excited to enter this next phase for
BioScrip to become a leading provider of infusion pharmacy and home
health services. We will leverage our geographic reach, and build upon
our reputation for clinical excellence and strong relationships with
national and local managed care customers. We are committed to being a
cost-effective partner to healthcare professionals who deliver value and
quality to the patients they serve.”
The transaction, which was unanimously approved by both companies’
boards of directors, is expected to close by late April 2012, subject to
customary conditions.
MTS Health Partners, L.P., acted as financial advisor to BioScrip, and
the law firm of King & Spalding, LLP served as legal counsel to BioScrip.
Conference Call
BioScrip will host a conference call to discuss its announcement today,
February 2, 2012 at 8:30 a.m. Eastern Time. Interested parties may
participate in the conference call by dialing 800-694-4033 (US), or
303-223-2684 (International), 5-10 minutes prior to the start of the
call. A replay of the conference call will be available for 48 hours
after the call's completion by dialing 800-633-8284 (US) or 402-977-9140
(International) and entering conference call ID number 21576952. An
audio web cast and archive of the conference call will also be available
under the “Investor Relations” section of the BioScrip website at www.bioscrip.com.
About BioScrip, Inc.
BioScrip, Inc. (www. bioscrip.com) (Nasdaq: BIOS) is a national provider
of pharmacy and home health services that partners with patients,
physicians, hospitals, payors and pharmaceutical manufacturers to
provide clinical management solutions and delivery of cost-effective
access to prescription medications and home health services. Our
services are designed to improve clinical outcomes to patients with
chronic and acute healthcare conditions while controlling overall
healthcare costs.
Forward Looking Statements – Safe Harbor
This press release may contain statements which constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including statements regarding the
intent, belief or current expectations of the Company, its directors, or
its officers with respect to the future operating performance of the
Company. Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks
and uncertainties, and that actual results may differ materially from
those in the forward-looking statements as a result of various factors.
Important factors that could cause such differences include whether or
not the transactions contemplated by the asset purchase agreement will
be consummated, the failure to realize annualized cost savings
associated with any restructuring or cost reduction efforts, the impact
of members of management in executing these efforts, the Company’s
ability to leverage core competencies or maximize margins and operating
cash flow and the Company’s ability to grow its Infusion/Home Health
segments organically or through acquisitions, and the risks described in
the Company's periodic filings with the Securities and Exchange
Commission, including BioScrip’s annual report on Form 10-K for the year
ended December 31, 2010 and quarterly report on Form 10-Q for the
quarter ended June 30, 2011.
Source: BioScrip, Inc.
In-Site Communications, Inc.
Investors:
Lisa
Wilson, 917-543-9932
or
Joele Frank, Wilkinson Brimmer
Katcher
Media:
Meaghan Repko / Sharon Stern,
212-355-4449
