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Done deal: Walgreens closes BioScrip acquisition
May 7th, 2012
DEERFIELD, Ill. – Walgreen Co. has wrapped up its acquisition of BioScrip Inc.'s community specialty pharmacies and centralized specialty pharmacy and mail-service pharmacy businesses.
BioScrip's community specialty pharmacy network includes 30 pharmacy locations in 16 states and the District of Columbia.
The companies said Monday that the transaction is valued at about $225 million and that BioScrip may receive up to an another $16 million — or have to refund up to about $6.4 million — of the sale price depending on Walgreens' retention of certain business included in the transferred assets.
With the purchase, announced in early February, Walgreens adds BioScrip's national community specialty pharmacy network of 30 pharmacy locations in 16 states and the District of Columbia, primarily serving HIV, oncology and transplant patients.
Walgreens also picks up assets of BioScrip's centralized specialty pharmacy business and traditional mail-service pharmacy, which dispenses prescriptions for drugstore.com, acquired by Walgreens last June. BioScrip had acquired drugstore.com's pharmacy operation in July 2010 and was under a five-year pact with the e-retailer to continue marketing the drugstore.com pharmacy.
"We welcome the BioScrip leaders and employees involved in the transaction to the Walgreens family," Kermit Crawford, president of pharmacy, health and wellness at Walgreens, said in a statement.
Walgreens noted that the deal furthers its "Well at Walgreens" strategy by advancing community pharmacy and bringing more specialty pharmacy products and services closer to patients. The chain said the acquisition, too, expands its central specialty and mail-service pharmacy operations.
"BioScrip's clinically focused community specialty pharmacies and access to additional limited distribution drug therapies, combined with Walgreens existing nationwide network of retail and health system pharmacies, creates a strong network of support for our core drug store business to provide specialty pharmacy solutions to our patients," Crawford explained. "This acquisition also significantly expands our nationwide reach to an additional half-million patients with chronic and complex health conditions."
For Elmsford, N.Y.-based BioScrip, the sale to Walgreens signals the company's exit from the community pharmacy arena. The company said it will maintain its infusion, home health, pharmacy benefit management and cash card businesses and continue to serve its infusion patient base and managed care customers through existing BioScrip pharmacies.
BioScrip began shifting its focus toward infusion/home health services with its $375 million acquisition of Critical Homecare Solutions (CHS), a provider of home infusion and nursing products and services to patients suffering from chronic and acute medical conditions. The deal, finalized in March 2010, created one of the nation's largest home care providers.
Though pharmacy services was nearly 78% of BioScrip’s fiscal 2011 sales, the company's infusion/home health segment saw stronger revenue growth. Overall sales for the year ended December 31 rose 12.5% to $1.8 billion. Revenue climbed 8.4% to $1.4 billion for pharmacy services but jumped 19.6% to $451 million for infusion/home health services, driven mainly by CHS.
BioScrip on Monday said the sale to Walgreens will enable it to sharpen its focus on and expand its infusion pharmacy and home health services business. The company also plans to use the proceeds from the deal to pay down debt.
"The completion of this sale is another important step forward in the execution of our strategic plan," stated BioScrip president and chief executive officer Rick Smith. "We now can accelerate building on our infusion pharmacy platform. With the completion of this divestiture, BioScrip is a more-focused company, both strategically and financially, with the ability to reduce corporate overhead related to our legacy business. Our strong reputation for clinical excellence and differentiated offering to our customers, combined with excellent relationships with national and local managed care customers, position us for the next phase of our growth."