CVS Health and Omnicare Sign Definitive Agreement for CVS Health to Acquire Omnicare






May 21, 2015

/PRNewswire/ -- CVS Health Corporation (NYSE:CVS) and Omnicare, Inc. (NYSE:OCR) announced today that they have entered into a definitive agreement for CVS Health to acquire Omnicare, the leading provider of pharmacy services to long term care facilities, for


per share in cash, for a total enterprise value of approximately

$12.7 billion

, which includes approximately

$2.3 billion

in debt. In total, Omnicare has approximately 13,000 employees at 160 locations in 47 states across the U.S.

With the acquisition of Omnicare, CVS Health will significantly expand its ability to dispense prescriptions in assisted living and long term care facilities, serving the senior patient population. CVS Health will also expand its presence in the rapidly growing specialty pharmacy business. Omnicare's complementary specialty pharmacy platform and clinical expertise will augment CVS Health's capabilities and enable CVS Health to continue to provide innovative and cost-effective solutions to patients and payors.

The boards of directors of both companies have approved the transaction, which is subject to approval by the holders of Omnicare's common stock, as well as other customary closing conditions, including applicable regulatory approvals. The transaction is expected to close near the end of 2015.

CVS Health expects to achieve significant purchasing and revenue synergies as well as operating efficiencies from this combination. The company expects the transaction to be approximately

20 cents

accretive to Adjusted EPS in 2016, its first full year, excluding integration and any one-time transaction costs. It is expected to become increasingly accretive to Adjusted EPS in subsequent years. The company has secured

$13 billion

in fully committed unsecured bridge financing from Barclays and expects to put in place permanent financing in the form of senior notes and/or term loans prior to the closing of the transaction. CVS Health expects that it will continue to have a solid balance sheet and, with its strong free cash flow, is committed to returning to its targeted leverage ratio of 2.7 times adjusted debt-to-EBITDA.

"The acquisition of Omnicare significantly expands our business, providing CVS Health access into a new pharmacy dispensing channel," said CVS Health President and CEO

Larry Merlo

. "It also creates new opportunities for us to extend our high-quality, innovative pharmacy programs to a broader population of seniors and chronic care patients as they transition across the care continuum. We have been impressed by the Omnicare team and what they have created for the patients they serve."

"We are pleased to have reached this agreement with CVS Health, one of the leading companies in the health care industry, which we believe will allow us to accelerate our mission of enhancing the quality and cost-effectiveness of care for complex patient populations," said Omnicare President and CEO

Nitin Sahney

. "This exciting combination is the result of a broad and thorough review of our strategic options. On behalf of the Omnicare team, I'd like to thank our 13,000 employees whose hard work and dedication has enabled Omnicare to become a recognized leader in pharmacy services."

Given the aging U.S. population, long term care is a growth segment of the health care system. More people are expected to use assisted living facilities and independent living communities in the coming decades, creating a substantial growth opportunity for those companies serving the health care needs of seniors.

In entering this new customer distribution channel, CVS Health will deliver meaningful benefits to consumers, patients, caregivers, and payors by providing highly coordinated clinical pharmacy care across multiple treatment settings from retail to long term care. CVS Health will help improve patient outcomes and provide enhanced continuity of care to patients and caregivers as they transition through the health care system.

CVS Health received investment banking and financial advice from Barclays and Evercore. The company was advised on transaction legal matters by Sullivan & Cromwell LLP and on antitrust matters by Dechert LLP.

BofA Merrill Lynch and Centerview Partners are serving as financial advisors to Omnicare. White & Case LLP is serving as Omnicare's legal counsel.

Teleconference and Webcast

CVS Health will be holding a conference call today for the investment community at

8:30 am (EDT)

to discuss the transaction. The dial-in number for the call is 800-750-5849 or, for international callers, 212-231-2921. An audio webcast of the call will be broadcast simultaneously on CVS Health's website for all interested parties. To access the webcast, please visit the investor relations section of the company's website at

. A replay of the call will be available from approximately

10:30 am (EDT)


May 21


10:30 am (EDT)

on May 28. It can be accessed by dialing 800-633-8284 or, for international callers, 402-977-9140, and entering access code 21769309. The webcast will be archived and available on the CVS Health website for a one-year period following the conference call.

About CVS Health

CVS Health (NYSE: CVS) is a pharmacy innovation company helping people on their path to better health. Through its 7,800 retail drugstores, nearly 1,000 walk-in medical clinics, a leading pharmacy benefits manager with more than 70 million plan members, and expanding specialty pharmacy services, the Company enables people, businesses and communities to manage health in more affordable, effective ways. This unique integrated model increases access to quality care, delivers better health outcomes and lowers overall health care costs. Find more information about how CVS Health is shaping the future of health at


About Omnicare

Omnicare, Inc., a Fortune 500 company based in

Cincinnati, Ohio

, provides comprehensive pharmaceutical services to patients and providers across

the United States

. As the market-leader in professional pharmacy, related consulting and data management services for skilled nursing, assisted living and other chronic care institutions, Omnicare leverages its unparalleled clinical insight into the geriatric market along with some of the industry's most innovative technological capabilities to the benefit of its long-term care customers. Omnicare also provides specialty pharmacy and key commercialization services for the bio-pharmaceutical industry through its Specialty Care Group. For more information, visit


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