CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

CVS to purchase Omnicare for 10 4bn

Article By: ,  Financial Analyst
May 21, 2015 6:26 PM

US drugstore operator CVS Health Corp announced today (May 21st) it will buy pharmacy services provider Omnicare Inc for $10.4 billion (£6.6 billion), offering $98 per Omnicare share.

The deal values Omnicare – the top US provider of pharmacy services to the elderly – at about $12.7 billion, including debt of about $2.3 billion, the companies said.

CVS, the United States' second largest drugstore company said it is looking to expand in the growing market serving the senior patient population, and the deal would increase its ability to dispense prescriptions in assisted-living and long-term-care facilities.

The company added the deal will also help expand its presence in the rapidly growing specialty pharmacy business, which sells high-cost drugs to treat complex or rare conditions.

The deal will "significantly expand" CVS' business

In 2014, Omnicare’s specialty care segment had revenue of $1.67 billion, up 20 per cent from the year before, the Wall Street Journal reports.

“The acquisition of Omnicare significantly expands our business, providing CVS Health access into a new pharmacy-dispensing channel,” CVS Health chief executive Larry Merlo said in a press release.

CVS said it expects the deal to add about 20 cents to adjusted earnings per share in 2016.

"Both (CVS and Omnicare) are big Part D players and there could be some scale benefits in negotiating with other payors," Cowen & Co analyst Charles Rhyee wrote in a note seen by Reuters.

The deal comes a few weeks after health insurer UnitedHealth Group Inc purchased Catamaran Corp for $12.8 billion in March and after Rite Aid Corp bought pharmacy benefit manager EnvisionRx for $2 billion in February.

Shares of Omnicare rose 1.2 per cent to $95.75 in premarket trading, while CVS's stock gained 1.6 per cent at $102.90.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024