Fred's Super Dollar to acquire Tenn. drugstore chain for $66M

Fred's Super Dollar has signed an agreement to acquire Reeves-Sain Drug Store, a private specialty and retail pharmacy company based in the Nashville, Tenn., area.



The acquisition includes both EntrustRx, a specialty pharmacy operation that has a strong regional presence in the Southeast serviced from facilities in Spring Hill, Tenn., and Columbus, Miss., as well as the single Reeves-Sain retail pharmacy in Murfreesboro, Tenn.



"We are excited to announce the acquisition of EntrustRx, which will further expand our presence in the specialty pharmacy arena — the largest growth area of the pharmacy industry," stated Fred's CEO Jerry Shore. "It offers a strong strategic fit to our current specialty pharmacy operations. We welcome the skilled and valued EntrustRx and Reeves-Sain Drug Store employees to the Fred's team and know that they will make great contributions to the future our pharmacy operations."



Shore noted that the EntrustRx acquisition will offer additional advantages to Fred's, including accreditation and access to expanded specialty networks, expertise in different disease states, access to limited-distribution medications, and a model for a scalable retail experience providing clinical services, immunizations, compounding and hospice medications.



Under the terms of the agreement, Fred's will acquire EntrustRx and the Reeves-Sain retail pharmacy for approximately $66 million, comprising $53 million in cash and a $13 million note payable. Fred's expects to utilize available cash and borrowings under its revolving loan and credit agreement to fund the transaction, which is expected to close in April 2015 subject to customary closing conditions. Fred's anticipates that the deal will be accretive to earnings per share in the first full year following closing.



EntrustRx, which is licensed in all 50 states, dispenses specialty pharmaceuticals to treat complex conditions and diseases that typically require ongoing support for extensive periods of time. Its main therapy lines include hepatitis C, oncology, growth hormones, multiple sclerosis and rheumatology.



Fred's was represented in the transaction by Baker, Donelson, Bearman, Caldwell & Berkowitz, with pharmacy regulatory counsel provided by Bass, Berry & Sims. Reeves-Sain Drug Store was represented in the transaction by Adams and Reese.