Omnicare to Acquire RxCrossroads, L.L.C.; Deal to Expand Specialty Pharmaceutical Business Platform.
COVINGTON, Ky. -- Omnicare, Inc. (NYSE NYSE
See: New York Stock Exchange :OCR OCR
in full optical character recognition
Scanning and comparison technique intended to identify printed text or numerical data. It avoids the need to retype already printed material for data entry. ), the nation's leading provider of pharmaceutical care for the elderly, and RxCrossroads, L.L.C., a leading provider of specialty pharmaceutical services, announced today that Omnicare has executed a definitive agreement to acquire substantially all of the assets of RxCrossroads and certain of its affiliates for a total purchase price of $235 million in cash.
RxCrossroads, based in Louisville, Kentucky
“Louisville” redirects here. For other uses, see Louisville (disambiguation). , provides specialty distribution, product support and mail order pharmacy services for pharmaceutical manufacturers and biotechnology companies Top 100 Biotechnology Companies
The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical companies. , generally for high-cost drugs used in the treatment of chronic disease states. Through its complement of services, RxCrossroads helps pharmaceutical manufacturers, physicians and patients navigate and solve access and distribution challenges for certain medications. RxCrossroads also develops and manages tailored product support programs to meet specific market needs including: reimbursement Reimbursement
Payment made to someone for out-of-pocket expenses has incurred. services, patient assistance programs, third-party logistics A third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or "third party" logistics services to companies for part, or sometimes all of their supply chain management function. services and pharmacy services and sampling programs nationwide. In total, RxCrossroads distributes drug and biological products with a retail value of more than $1 billion.
The transaction is subject to the expiration of the waiting period under the Hart-Scott-Rodino 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. Improvement Act of 1976, as amended, and is expected to close during the third quarter of 2005. As it contracts with manufacturers to provide products on a consignment The delivery of goods to a carrier to be shipped to a designated person for sale. A Bailment of goods for sale.
A consignment is an arrangement resulting from a contract in which one person, the consignor, either ships or entrusts goods to another, the basis, RxCrossroads' revenues from service operations are currently running at the annualized annualized
Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate of $46 million, and the transaction is expected to be modestly accretive to Omnicare's earnings per share in 2005, with accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes.
The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the increasing in 2006 and beyond.
"We view the acquisition of RxCrossroads as a major new opportunity to leverage the core strengths of our existing businesses to enhance Omnicare's future growth. The addition of RxCrossroads will enhance Omnicare's position in capitalizing on the rapid growth in drug development and discovery, particularly in biotechnology, and the trend toward the outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of product research, launch and post-launch services. This transaction will allow us to provide the full spectrum of product development, commercialization and post-commercialization services: from drug discovery and research services through our existing CRO business to product distribution, support, patient assistance and reimbursement services," said Joel F. Gemunder, president and chief executive officer of Omnicare. "This is important as the acquisition of RxCrossroads differentiates Omnicare as the only provider of end-to-end custom product solutions to pharmaceutical and biotechnology companies. This will not only allow us to provide greater service offerings but will allow us to leverage the investment we have made in our CRO business, as well as the existing infrastructure of our institutional pharmacy network and our client relationships with pharmaceutical and biotechnology companies."
"Pharmaceutical companies, medical device manufacturers and biotechnology firms choose RxCrossroads because of our unique capabilities and tailored approach to the development and execution of client programs," said Jim Karp, chief executive officer of RxCrossroads. "We are pleased to combine RxCrossroads' strengths with those of Omnicare and thereby create even greater opportunities for both companies to expand services for manufacturers, patients and providers."
"The management and staff at RxCrossroads look forward to the continued growth and development of our core service offerings from our Louisville-based operation centers as well as seeking innovative new services made possible by joining Omnicare," said Nitin Sahney, president of RxCrossroads. "The synergies between Omnicare and RxCrossroads will ensure integrated product commercialization service offerings to existing and new clients. Using our combined knowledge of healthcare product development, reimbursement and distribution services, we will deliver a range of services that support speed to market, brand uptake uptake /up·take/ (up´tak) absorption and incorporation of a substance by living tissue.
n. and brand loyalty."
Concluding, Mr. Gemunder noted that RxCrossroads' management has a proven track record of rapid growth and attractive profitability. "We are pleased RxCrossroads is joining the Omnicare organization. The resources and expertise it brings, along with the complementary nature of the combined businesses, enhance our ability to participate in the drug development process and offer commercialization and post launch services providing Omnicare a distinct advantage as we expand our specialty pharmaceutical business and provide a major new avenue of growth."
Omnicare, Inc. (NYSE:OCR), a Fortune 500 company based in Covington, KY, is a leading provider of pharmaceutical care for the elderly. Omnicare serves residents in long-term care facilities long-term care facility
See skilled nursing facility. comprising approximately 1,090,000 beds in 47 states in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and in Canada, making it the largest U.S. provider of professional pharmacy, related consulting and data management services for skilled nursing, assisted living as·sist·ed living
A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. and other institutional healthcare providers. Omnicare also provides clinical research services for the pharmaceutical and biotechnology industries in 30 countries worldwide.
Forward Looking Statements
Statements in this press release concerning Omnicare's and RxCrossroads' business outlook or future economic performances, anticipated profitability, revenues, expenses or other financial items, anticipated cost synergies Cost Synergy
In the context of mergers, cost synergy is the savings in operating costs expected after two companies, who compliment each other's strengths, join.
The savings in operating costs usually come in the form of laying off employees. , economies of scale and product or service line growth, together with other statements that are not historical facts, are 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. that are estimates reflecting the best judgment of Omnicare and RxCrossroads based on currently available information. Such forward-looking statements involve actual known and unknown risks, uncertainties, contingencies and other factors that could cause actual results, performance or achievements to differ materially from those stated. Such risks, uncertainties, contingencies and other factors, many of which are beyond the control of Omnicare, include, but are not limited to, overall economic, financial and business conditions; trends for the continued growth of the businesses of Omnicare and RxCrossroads; trends in the long-term healthcare and contract research industries generally; profitability and cost synergies of the acquisition; the impact of the potential NeighborCare acquisition on Omnicare's earnings in 2005 and beyond; the impact and pace of pharmaceutical price increases; delays and further reductions in reimbursement by the government and other payors to customers and to Omnicare as a result of pressure on federal and state budgets due to the continuing economic downturn and other factors; the overall financial condition of Omnicare's customers; Omnicare's ability to assess and react to the financial condition of its customers; the ability of vendors and business partners to continue to provide products and services to Omnicare; the continued successful integration of RxCrossroads, and the ability to realize anticipated revenues, economies of scale, cost synergies and profitability; pricing and other competitive factors in the industry; increases or decreases in reimbursement; the effect of new government regulations, executive orders and/or legislative initiatives, trends in healthcare funding issues, including, but not limited to, state Medicaid budgets, enrollee eligibility, escalating drug prices due to higher utilization among seniors and the aging of the population; expectations concerning increasing Medicare admissions and improving occupancy rates Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time
pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) ; the introduction of more expensive medications and the increasing use of generic medications; the impact of any changes in healthcare policy relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc the future funding of the Medicaid and Medicare programs; the cost-effectiveness of pharmaceuticals in treating chronic illnesses for the elderly; the impact of the Medicare drug benefit, signed into law in December 2003 and effective in 2006, and its implementing regulations; the effect of any changes and considerations in long-term healthcare funding policies for Medicare and Medicaid Medicare and Medicaid
U.S. government programs in effect since 1966. Medicare covers most people 65 or older and those with long-term disabilities. Part A, a hospital insurance plan, also pays for home health visits and hospice care. programs; the ability of Omnicare to utilize its expertise in geriatric geriatric /ger·i·at·ric/ (jer?e-at´rik)
1. pertaining to elderly persons or to the aging process.
2. pertaining to geriatrics.
1. pharmaceutical care and pharmaceutical cost management and its database on drug utilization and outcomes in the elderly to meet the anticipated challenges of the healthcare environment and the implementation of the Medicare drug benefit; efforts by payors to control costs; the outcome of 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. ; the failure of Omnicare or the long-term care facilities it serves to obtain or maintain required regulatory approvals or licenses; the ability to attract and retain needed management; the impact and pace of technological advances; the ability to obtain or maintain rights to data, technology and other intellectual property; the impact of consolidation in the pharmaceutical and long-term care long-term care (LTC),
n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. industries; volatility in the market for Omnicare's stock and in the financial markets generally; access to capital and financing; the demand for Omnicare's products and services; variations in costs or expenses; changes in tax law and regulation; changes in accounting rules and standards; and other risks and uncertainties described in Omnicare's reports and filings with the Securities and Exchange Commission. There can be no assurance that such factors will not affect the accuracy of such forward-looking statements and, except as otherwise required by law, Omnicare does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or to update the information in this release.