BioScrip, Inc. (Nasdaq: BIOS) today announced it has signed a definitive
agreement to acquire Critical Homecare Solutions (“CHS”), a leading
provider of home infusion and home health agency services to patients
suffering from chronic and acute medical conditions. Under the terms of
the transaction, BioScrip will pay an aggregate of $343.2 million
through a combination of cash and stock. In addition, the Company will
also issue 3.40 million warrants with a $10.00 exercise price and
five-year term to CHS shareholders. The combination of BioScrip and CHS
will create an industry leading provider consisting of specialty
pharmacy, home infusion and home health care services from 110 locations
nationwide.
“The acquisition of CHS is a transformative event for BioScrip and is
consistent with our growth strategy to expand our geographic reach,
increase gross profit, operating income and EBITDAO margins, and to
become the clinical leader in infusion, oral and injectable specialty
pharmacy services and care management programs”
“The acquisition of CHS is a transformative event for BioScrip and is
consistent with our growth strategy to expand our geographic reach,
increase gross profit, operating income and EBITDAO margins, and to
become the clinical leader in infusion, oral and injectable specialty
pharmacy services and care management programs,” said Richard H.
Friedman, Chairman and Chief Executive Officer of BioScrip. “As a result
of the transaction, BioScrip will become one of the largest home
infusion providers in the United States with a stronger and broader
clinical services infrastructure. The CHS acquisition will add 35
specialty infusion pharmacies, including 16 Ambulatory Treatment Centers
(ATC) across 22 states, and 33 nursing locations to BioScrip’s existing
platform. With CHS, we will be positioned to offer a comprehensive
national integrated solution for pharmacy and clinical management
services, capable of handling all delivery technologies for our key
constituencies – patients, payers, physicians and pharmaceutical
manufacturers.”
CHS generated approximately $252.0 million of revenue and approximately
$39.0 million of adjusted EBITDA, or 15% of revenue, for the trailing
twelve month period ending September 30, 2009. On a pro forma basis, the
combined company generated approximately $1.6 billion in revenue and
$73.4 million of adjusted EBITDAO for the trailing twelve month period
ending September 30, 2009.
Key Benefits of the Transaction Include:
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Ability to cross-sell all services on a national basis, enabling
accelerated pull-through opportunities;
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Expanded national footprint with strong regional and local management
leadership;
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Focus on traditional higher margin therapies, resulting in overall
increased margins;
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Broadened clinical expertise;
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Comprehensive nursing component to better manage the chronically ill;
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Access to 450 additional payor relationships;
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Annual cost savings of $5.0 to $7.0 million, including enhanced volume
purchase discounts.
Transaction Details
Under the terms of the agreement, BioScrip will acquire CHS for a total
of $343.2 million in cash and stock. The consideration will include cash
of $242.0 million (including approximately $132.0 million to repay CHS
debt) and the issuance of $101.2 million of common stock, or
approximately 12.94 million shares (based on BioScrip’s closing stock
price of $7.82 on Friday, January 22, 2010). BioScrip will also issue
3.40 million warrants with a $10.00 exercise price and five-year term to
CHS shareholders.