CVS Caremark To Buy Apria Healthcare's Coram Infusion Business For $2.1 Bln

(RTTNews) - Drugstore chain CVS Caremark Corp. (CVS) said Wednesday that it has agreed to acquire Coram LLC, the specialty infusion services and enteral nutrition business unit of Apria Healthcare Group Inc., for about $2.1 billion.

CVS Caremark noted that the acquisition will expand its specialty pharmacy offering and is consistent with its goal of investing in core businesses that help drive growth.

Denver, Colorado-based Coram is a provider of infusion therapies and nutrition services to more than 20,000 patients each month. Coram cares for patients primarily through home infusion as well as a national network of more than 85 locations, including more than 65 ambulatory infusion suites, and has about 4,500 employees nationwide.

In addition, CoramRx provides specialty pharmaceuticals, drug delivery and clinical management services to patients with chronic or rare conditions. The division provides injectable, infused and oral medications to patients and physician offices nationwide, supporting both major medical and pharmacy benefit programs.

Apria Healthcare is a privately-held company that provides home oxygen therapy, sleep apnea products and services, home infusion therapy, enteral nutrition, Negative Pressure Wound Therapy or NPWT, and home medical equipment through about 500 locations in the U.S. Apria Healthcare is a portfolio company of private equity giant Blackstone Group, L.P. (BX).

Commenting on the deal, Jon Roberts, president of CVS Caremark Pharmacy Services, said, "Bringing together CVS Caremark's unique range of specialty pharmacy services with Coram's infusion capabilities will expand our competitive offerings in the specialty arena. Infusion will be a valuable component of our broad specialty pharmacy offering going forward."

The companies expect the transaction to close by the end of the first quarter of 2014. CVS Caremark noted that costs related to infusion of specialty medications may be covered through the medical or pharmacy benefit, depending on the site of care.

CVS Caremark said that its analysis demonstrated that providing infusion services in the home or an ambulatory setting are by far the most cost-effective sites of service.

Woonsocket, Rhode Island-based CVS Caremark expects Coram to generate about $1.4 billion in revenues during the first twelve months following the close of the deal.

Including one-time transaction and integration costs, the company expects the transaction to have an immaterial impact on its overall financial results in 2014. However, the company expects the transaction to add $0.03 to $0.05 to its adjusted earnings per share in 2015, the first full year following the close of the deal.

Barclays served as the financial advisor to CVS Caremark on the transaction, while Sullivan and Cromwell LLP served as legal advisor and Dechert LLP served as legal advisor from an anti-trust perspective.

For Apria Healthcare, Goldman, Sachs & Co. and Blackstone Advisory Partners served as financial advisors, while Simpson Thacher & Bartlett LLP served as its legal advisor.

In Wednesday's regular session, CVS is trading at $66.68, up $0.59 or 0.89 percent on a volume of 251,550 shares.