AmerisourceBergen Corporation (ABC) recently announced that it has agreed to acquire CVS Caremark Corporation’s (CVS) subsidiary TheraCom LLC, for $250 million. The acquisition is expected to close in the first quarter of fiscal 2012 for AmerisourceBergen, which ends on December 31, 2011. AmerisourceBergen expects this transaction to have no impact on fiscal 2012 earnings, but will be slightly accretive in fiscal 2013.
TheraCom provides a wide range of support to pharmaceutical and biotechnology drug manufacturers including consulting and reimbursement services, and will be merged with AmerisourceBergen’s AmerisourceBergen Consulting Services (ABCS) segment. We believe TheraCom’s services will complement ABCS’s existing services and expand the group’s pharmacy benefit reimbursement capabilities.
AmerisourceBergen’s Recent Acquisitions
Earlier during the month, AmerisourceBergen completed the acquisition of IntrinsiQ LLC for $35 million in cash and the acquisition of Premier Source. Premier Source has also been merged with AmerisourceBergen’s ABCS segment, thereby expanding the department’s capabilities. IntrinsiQ has been merged with ION Solutions, which is a unit of AmerisourceBergen Specialty Group. We believe that the combination of IntrinsiQ’s software applications and ION Solutions’ existing oncology technology platform will enhance the company’s proprietary data offerings.
We note that AmerisourceBergen has been pretty active on the acquisition front in order to supplement organic growth, spending more than $1 billion on acquisitions in the last eight years. Additionally, AmerisourceBergen, which exited the third quarter of fiscal 2011 with a cash balance of about $2.0 billion, plans to spend around $200 to $300 million in 2011 on the acquisition of pharmaceutical, distribution or related services business.
We currently have a Neutral recommendation on AmerisourceBergen. The stock carries a Zacks #3 Rank (Hold rating) in the short-run.
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