Omnicare Inc. (NYSE: OCR), the nation’s largest long-term care pharmacy provider, will be acquired by CVS Health Corp., Bloomberg News first reported Wednesday. The deal was confirmed early Thursday and will net an enterprise value for Omnicare of $12.7 billion, including $2.3 billion in debt.
Omnicare has 13,000 employees at 160 locations in 47 states across the U.S. and will allow CVS to expand its specialty pharmacy market, the company said.
“The acquisition of Omnicare significantly expands our business, providing CVS Health access into a new pharmacy dispensing channel,” said CVS Health President and CEO Larry Merlo. “It also creates new opportunities for us to extend our high-quality, innovative pharmacy programs to a broader population of seniors and chronic care patients as they transition across the care continuum. We have been impressed by the Omnicare team and what they have created for the patients they serve.”
Omnicare was rumored to be seeking a buyer, news outlets reported last month, with CVS and Express Scripts Holding Co. as frontrunners for the potential acquisition. Trading of Omnicare shares was halted following the reports at the time.
A deal could come as soon as this week, Bloomberg News says, citing people with knowledge of the matter. The company’s market value based on its current share price is around $9.2 billion, up from previous estimates of about $8.5 billion a month ago.
The agreement is uncertain, but both companies bring a focus in Medicare Part D during a time when demand for pharmacy services is rising.
Cinnicinnati-based Omnicare, which has long held a presence in the long-term care market, has also faced legal troubles in recent years. In 2013, the company agreed to a $120 million federal settlement resolving charges over drug pricing under Medicare Part A for skilled nursing facilities.
The company is known for its participation in the long-term care market, but has also made efforts to increase its presence among assisted living and independent living clients.
Written by Elizabeth Ecker