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Pharmacy manager PharMerica explores possible sale -sources

Pharmacy manager PharMerica explores possible sale -sourcesPharmacy manager PharMerica explores possible sale -sources

 

By Carl O’Donnell and Greg Roumeliotis

PharMerica Corp (PMC.N), a U.S. pharmacy manager for long-term care facilities, is exploring strategic alternatives including a potential sale, according to people familiar with the matter.

 

The move comes five years after PharMerica received an unsolicited bid from rival Omnicare Inc, which subsequently backed off from a hostile takeover after the U.S. Federal Trade Commission challenged the move on antitrust grounds.

PharMerica is working with Bank of America Corp (BAC.N) and UBS Group AG (UBSG.S) on a sale process that has attracted interest from private equity firms, the people said. It is not certain that the company will decide to sell itself, the people cautioned.

The sources asked not to be identified because the matter is not public. PharMerica, UBS and Bank of America declined to comment.

PharMerica shares jumped as much as 19 percent on the news and were up 13 percent at $25.55 in late morning on the New York Stock Exchange, boosting the company’s market capitalization to $800 million.

PharMerica was created in 2007 by a merger of businesses spun off from AmerisourceBergen Corp (ABC.N) and Kindred Healthcare Inc (KND.N). It provides pharmacy services, ranging from dispensing prescriptions to trying to control drug costs, to about 15 percent of U.S. nursing homes.

The company’s sales have been under pressure as government payers such as Medicare reduce payments for some types of care. Earlier this month, its chief financial officer, David Froesel, announced plans to retire. The company is searching for a replacement.

In recent years, pharmaceutical benefits managers, such as CVS Health Corporation (CVS.N) and Express Scripts Holding Co (ESRX.O), have been buying up specialty pharmacies as part of an effort to bolster their bargaining positions with drugmakers and hold down drug costs.

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In 2015, CVS Health acquired Omnicare for nearly $13 billion, including debt. The same year, Rite Aid Corp (RAD.N) acquired Envision Pharmaceutical Services from buyout firm TPG Capital LP for around $2 billion.

Earlier this week, Reuters reported that a Canadian long-term care-oriented specialty pharmacy, Medical Pharmacies Group, is also exploring a sale.

(Reporting by Carl O’Donnell and Greg Roumeliotis in New York; Editing by Grant McCool and Matthew Lewis)

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