CVS enters new dispensing channel with $12.9 billion purchase

Woonsocket, R.I. – CVS Health Corp. is entering a new pharmacy dispensing channel with the completion of an approximately $12.9 billion acquisition of Omnicare, a provider of pharmacy services to long-term care facilities. CVS initially announced the deal in May 2015.



CVS expects the deal to significantly expand its ability to dispense prescriptions in assisted living and long term care facilities, as well as expand its presence in the specialty pharmacy business.



CVS also expects to achieve 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 earnings per share in 2016, its first full year, excluding integration and any one-time transaction costs. It is expected to become increasingly accretive to adjusted earnings per share in subsequent years.



CVS has not disclosed how it will integrate Omnicare, which employs about 600 people at its Cincinnati headquarters. Omnicare CEO Nihin Sahney may be entitled to more than $23 million in cash, stock and other considerations if he loses his job as a result of the acquisition. Other executives may also be entitled to compensation.