Catalyst Health Solutions, SXC complete merger

SXC Health Solutions Corp. (NASDAQ: SXCI) (TSX: SXC), a leading provider of pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefits management industry, announces that it has completed its previously disclosed merger of Catalyst Health Solutions, Inc. with a wholly-owned subsidiary of SXC.  The merger was effective today following overwhelming approval by SXC and Catalyst stockholders at special meetings held this morning.

The transaction creates the fourth largest PBM by prescription volume, with an annual prescription volume of more than 200 million adjusted PBM scripts.  With combined annual revenues of approximately $13 billion, the combined company is expected to cover approximately 25 million members.  SXC will update its 2012 guidance to account for the completion of the Catalyst merger in its second quarter 2012 earnings release.

"The combination of SXC and Catalyst merges two highly successful, fast-growing enterprises to deliver the resources, skill and scale to solve the healthcare cost challenge," said Mark Thierer, Chairman and CEO of SXC.  "The combined company provides the leading alternative to the traditional approach of other PBMs through its purchasing power, coupled with a flexible, agile, client-centered delivery model.  Together, we are able to chart a new course to deliver distinct advantages to all stakeholders."

Financial Considerations

Under the terms of the merger agreement, Catalyst stockholders will receive $28.00 in cash and 0.6606 of a share of SXC stock for each Catalyst share.

As previously announced, the transaction is expected to be accretive to SXC's non-GAAP earnings in 2013, which excludes transaction-related amortization expected to be approximately $200 million in the first twelve months after closing. The combined company expects to achieve approximately $125 million of annual cost synergies over the next 18 to 24 months through improved scale and operating leverage.

Board of Directors

SXC also announced today that two new directors, Harry M. Kraemer, Jr. and Steven B. Epstein, will join the SXC board following the completion of the transaction.  Mr. Epstein's appointment will become effective in August 2012.

In addition, Curtis J. Thorne and Philip R. Reddon have tendered their resignations as SXC directors, effective immediately. "Curt Thorne and Phil Reddon have been integral members of our Board of Directors as we have grown from a healthcare IT company into a leader in the PBM industry," said Mr. Mark Thierer, Chairman and CEO of SXC. "On behalf of the company, I would like to thank Curt and Phil for their contribution, strategic counsel and leadership and years of service to SXC."