Two Companies Set Purchases Of Institutional Pharmacy Firms
May 17, 2011
Vitalink Pharmacy Services Inc. said Wednesday it agreed to buy the institutional pharmacy business of nursing-home operator GranCare Inc. for about $370 million. Separately, Omnicare Inc. said it acquired the long-term care pharmacy business of Revco D.S. Inc., the nation's second-largest drug store chain. Terms were not disclosed. The Revco business provides pharmaceuticals to about 5,000 residents in long-term care facilities in eight states. Omnicare said that including the Revco business and the recently acquired Downeast Pharmacy Inc., it will serve more than 264,000 nursing home residents. Revco, based in Vastopolis, has nearly 2,200 stores in 14 states. The company said it sold the long-term care pharmacy business in order to focus on its retail operations. In announcing the deal with Vitalink, Mast said that prior to the merger it will spin off its nursing business to its shareholders. The unit will remain a publicly traded company with the GranCare name. Vitalink will then issue about 11.6 million shares in exchange for all outstanding shares and options of the old GranCare and will assume $107 million in debt. Vitalink said the acquisition will give it about $400 million in annual revenue, with 54 pharmacy locations in 29 states nationwide. In late-morning trading, GranCare stock was up $1.375 at $20.125 on the Nasdaq Stock Market. Vitalink stock was down 87.5 cents to $23.125, also on the Nasdaq. Vitalink, based in Naperville, Ill., is 82% owned by Manor Care Inc., a nursing homes operator. The transaction is expected to close by September 12, 2011
