PharMerica Corporation (NYSE: PMC), a national provider of institutional pharmacy and hospital pharmacy management services, today announced that it has signed an asset purchase agreement to acquire substantially all of the assets of Chem Rx Corporation for $70.6 million. The acquisition is subject to the approval of the Bankruptcy Court and Chem Rx not receiving a higher offer from a third-party through a Court-approved auction process. PharMerica intends to pay the purchase price with existing cash and borrowings under its revolving line of credit.
Chem Rx Corporation is a long term care pharmacy company doing business in New York State, New Jersey, Pennsylvania, and Florida. Chem Rx has been in business for over 40 years and provides prescription and non-prescription drugs, intravenous medications, durable medical equipment items and surgical supplies to approximately 60,000 patients. Chem Rx filed for Chapter 11 bankruptcy protection in the Delaware District of United States Bankruptcy Court on May 11, 2010. The proposed transaction will take place pursuant to Section 363 of the United States Bankruptcy Code. PharMerica is seeking to be designated as the "stalking horse" in the bankruptcy proceedings. The transaction, if approved by the Bankruptcy Court, is expected to close during the fourth quarter of 2010. The transaction is also subject to the satisfaction of the conditions set forth in the purchase agreement and other customary antitrust and regulatory approvals.
Commenting on the announcement, Gregory S. Weishar, PharMerica Corporation's Chief Executive Officer, said, "Chem Rx offers PharMerica a great opportunity to enter the New York and New Jersey markets and expand our national footprint. Chem Rx brings over four decades of experience in the New York marketplace, which, combined with PharMerica's scale and financial stability, will provide significant benefits to Chem Rx's customers. Chem Rx will operate as a separate subsidiary, and PharMerica looks forward to partnering with Jerry Silva and his management team."
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