CVS Pleased with Caremark's Rejection of Express Scripts' Highly Conditional, Unsolicited Offer.CVS/Caremark Merger Expected to Close in the First Quarter of 2007 WOONSOCKET Woonsocket (w  nsŏk`ĭt, w n–), city (1990 pop. 43,877), Providence co., N R.I. , R.I. -- In response to the decision announced by the
Board of Directors of Caremark Rx  The introduction to this article may be too long. Please help improve the introduction by moving some material from it into the body of the article according to the suggestions at , Inc. (NYSE NYSESee: New York Stock Exchange : CMX CMX Corel Presentation Exchange (file extension) CMX Cisco Mobile Exchange CMX Cloaca Maxima (sewage system of ancient Rome; Finnish rock band) CMX Crisis Management Exercise ) relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Express Scripts' (NYSE: ESRX) unsolicited un·so·lic·it·ed adj. Not looked for or requested; unsought: an unsolicited manuscript; unsolicited opinions. unsolicited Adjective offer, CVS (1) (Concurrent Versions System) A version control system for Unix that was initially developed as a series of shell scripts in the mid-1980s. CVS maintains the changes between one source code version and another and stores all the changes in one file. Corporation (NYSE: CVS) issued the following statement: "We are pleased with the decision of the Caremark board to reaffirm re·af·firm tr.v. re·af·firmed, re·af·firm·ing, re·af·firms To affirm or assert again. re its commitment to the merger of CVS and Caremark and we look forward to closing our transaction during the first quarter of 2007," said Tom Ryan
Tom Ryan (born August 3 1986), who plays under the pseudonym Ogre 2, is a professional gamer from Pickerington, Ohio, USA. , Chairman, President and Chief Executive Officer of CVS. "With the FTC FTC See Federal Trade Commission (FTC). antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. waiting period already expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. and our joint proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. on file at the SEC, we remain firmly committed to completing our combination and passing along the many benefits to shareholders, employers, plan sponsors and consumers as soon as possible." CVS noted the following:
The merger of CVS and Caremark offers a clear path and substantially
more certainty to close.
The Express Scripts offer is highly conditional. Specifically,
the Express Scripts offer, which would reduce the number of
major competitors in the PBM industry from 3 to 2, carries
significant antitrust risk that could well prevent it from
ever being approved and, at a minimum, would substantially
delay closing of the transaction, with adverse consequences.
In contrast, the antitrust waiting period for the CVS/Caremark
transaction has already expired without a second request, and
the proxy statement is already on file with the SEC. The
planned first quarter closing will enable the merged
CVS/Caremark to quickly begin to offer benefits to
shareholders, employers, plan sponsors and consumers.
A combined Express Scripts/Caremark would likely result in substantial
customer defections and diminished value, particularly in light of the
high degree of leverage.
Caremark has expressed its deep concern about key customer
defections in the event of a combination with Express Scripts.
The loss of key customers presents an unacceptable risk to
shareholders, particularly in light of the leverage profile of
a combined Caremark/Express Scripts. This should be of concern
to Caremark shareholders, who would own 57% of the combined
company. Express Scripts has also made unsubstantiated claims
about synergies, which could be substantially revised
following due diligence. In contrast, CVS has had the
opportunity to conduct extensive due diligence and integration
planning and now conservatively estimates a minimum of $500
million in pre-tax cost synergies.
CVS/Caremark will offer fully integrated products and services that
will accelerate revenue growth.
The CVS/Caremark combination will provide significant
opportunities to drive incremental revenues that only a
leading drugstore/PBM combination can achieve. Payors and
consumers have been seeking new ways to control costs, reduce
complexity, and improve health outcomes. Trends affecting the
healthcare industry, including an aging population, the trend
toward consumer driven healthcare, the need for greater
compliance with prescribed drug therapies, the increasing use
of high cost specialty drugs and the increasing need for
tailored disease management programs, all require new products
and services that can be more effectively delivered by the
fully integrated CVS/Caremark.
CVS/Caremark offers substantially greater shareholder value than the
highly conditional Express Scripts' offer.
The vertical integration of CVS/Caremark will enable the new
company to develop and offer unique products and services that
will reduce costs, improve outcomes, accelerate revenue growth
and create substantial shareholder value. In addition, CVS and
Caremark expect the combination to be accretive to EPS in the
first full year after close and increasingly accretive
thereafter. With the very significant free cash flow
generation capabilities of the combined company, as well as
the strength of the post-merger balance sheet, CVS/Caremark
will be well positioned to capitalize on strategic
opportunities and enhance total return to shareholders through
significant common share repurchases and dividends.
CVS/Caremark shareholders will benefit from the highly skilled
Caremark management team.
The CVS/Caremark merger of equals will enable CVS/Caremark
shareholders to benefit from having the Caremark management
team run the combined PBM business. At the same time, a new
team comprised of both CVS and Caremark will be transforming
the delivery of pharmacy products and services to this
changing marketplace. This is a relationship business and one
of the best attributes of the combined company will be the
strength of the management teams, which will stay in place.
CVS and Caremark have extensive experience in integrating large-scale
acquisitions, while Express Scripts has never integrated an
acquisition of this size.
CVS has a long and successful track record of executing
successful integrations, including Osco/Sav-on, Eckerd, Revco
and Arbor. Caremark has successfully integrated the largest
PBM acquisition ever with its purchase of AdvancePCS. In the
CVS/Caremark merger, Caremark will be integrating CVS' $3
billion revenue PBM, PharmaCare, into Caremark, a far more
manageable undertaking than their previous successful
integration.
CVS is America's largest retail pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. , operating over 6,200 retail and specialty pharmacy stores in 43 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . With more than 40 years of dynamic growth in the retail pharmacy industry, CVS is committed to being the easiest pharmacy retailer for customers to use. CVS innovatively serves the healthcare needs of all customers through its CVS/pharmacy CVS/pharmacy (also CVS) is a pharmacy and convenience store chain in the United States. CVS is also the largest pharmacy chain in the United States, based on the number of stores. stores; its online pharmacy  This article or section may deal primarily with the U.S. and may not present a worldwide view. , CVS.com; its retail-based health clinic subsidiary,
MinuteClinic; and its pharmacy benefit management A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. , mail order and
specialty pharmacy subsidiary, PharmaCare. General information about CVS
is available through the Investor Relations Investor relationsThe process by which the corporation communicates with its investors. portion of the Company's website, at http://investor.cvs.com, as well as through the pressroom portion of the Company's website, at www.cvs.com/pressroom. Cautionary Statement Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This document contains certain forward-looking statements about CVS and Caremark. When used in this document, the words "anticipates", "may", "can", "believes", "expects", "projects", "intends", "likely", "will", "to be" and any similar expressions and any other statements that are not historical facts, in each case as they relate to CVS or Caremark, the management of either such company or the transaction are intended to identify those assertions as forward-looking statements. In making any of those statements, the person making them believes that its expectations are based on reasonable assumptions. However, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected or anticipated. These forward-looking statements are subject to numerous risks and uncertainties. There are various important factors that could cause actual results to differ materially from those in any such forward-looking statements, many of which are beyond the control of CVS and Caremark, including macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. condition and general industry conditions such as the competitive environment for retail pharmacy and pharmacy benefit management companies, regulatory and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. matters and risks, legislative developments, changes in tax and other laws and the effect of changes in general economic conditions, the risk that a condition to closing of the transaction may not be satisfied, the risk that a regulatory approval that may be required for the transaction is not obtained or is obtained subject to conditions that are not anticipated and other risks to consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the transaction. The actual results or performance by CVS or Caremark, and issues relating to the transaction, could differ materially from those expressed in, or implied by, any forward-looking statements relating to those matters. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of CVS or Caremark, the combined company or the transaction. Important Information for Investors and Stockholders CVS and Caremark filed a preliminary joint proxy statement/prospectus with the SEC in connection with the proposed merger on December 19, 2006. CVS and Caremark urge investors and stockholders to read the joint proxy statement/prospectus when it becomes available and any other relevant documents filed by either party with the SEC because they will contain important information. Investors and stockholders will be able to obtain the joint proxy statement / prospectus and other documents filed with the SEC free of charge at the website maintained by the SEC at www.sec.gov. In addition, documents filed with the SEC by CVS will be available free of charge on the investor relations portion of the CVS website at http://investor.cvs.com. Documents filed with the SEC by Caremark will be available free of charge on the investor relations portion of the Caremark website at www.caremark.com. CVS and certain of its directors and executive officers are participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies from the stockholders of CVS in connection with the merger. A description of the interests of CVS's directors and executive officers in CVS is set forth in the proxy statement for CVS's 2006 annual meeting of stockholders, which was filed with the SEC on March 24, 2006 and in the preliminary joint proxy statement/prospectus referred to above. Caremark, and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the merger. A description of the interests of Caremark's directors and executive officers in Caremark is set forth in the proxy statement for Caremark's 2006 annual meeting of stockholders, which was filed with the SEC on April 7, 2006 and in the preliminary joint proxy statement/prospectus referred to above. |
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