AmerisourceBergen and H. D. Smith today announced that the companies have signed a definitive agreement under which AmerisourceBergen will purchase H. D. Smith for $815 million in cash.
AmerisourceBergen plans to fund the acquisition through the issuance of new long-term debt. The acquisition is expected to be slightly accretive to adjusted diluted earnings per share (EPS) in fiscal year 2018, and to achieve full run-rate synergies and be approximately $0.15 accretive to the Company’s adjusted EPS in fiscal year 20201. This acquisition was not contemplated in the previous guidance the Company provided for fiscal year 2018. Based on the estimated contribution of this acquisition, the Company now expects revenue growth to be in the range of 8 percent to 11 percent, adjusted operating income growth to be in the range of 4 percent to 7 percent and Pharmaceutical Distribution Services segment operating income growth in the range of 4 percent to 7 percent. AmerisourceBergen is reaffirming the rest of its previously announced fiscal 2018 financial guidance. The transaction is subject to regulatory review and other closing conditions and is expected to close in early calendar 2018.
“The acquisition of H. D. Smith – a best-in-class private distributor with facilities across the country and a diversified customer base – strengthens our core business and expands and enhances our strategic scale in U.S. pharmaceutical distribution,” said Steven H. Collis, Chairman, President and Chief Executive Officer of AmerisourceBergen. “This acquisition also builds upon our foundation and meaningfully expands our support for independent community pharmacies. We remain committed to building our business to meet the evolving needs of our customers, driving long-term value for the healthcare system and delivering compelling returns for our shareholders. Importantly, we are united in our responsibility to create healthier futures.”
H. D. Smith is among the largest national wholesalers and, with 10 distribution centers across the U.S., it provides full-line distribution of brand, generic and specialty drugs, as well as high-value services and solutions for manufacturers and healthcare providers. H. D. Smith customers include retail pharmacies, specialty pharmacies, long-term care facilities, institutional / hospital systems and independent physicians and clinics. H. D. Smith subsidiaries Triplefin, a pharmaceutical brand support provider, and Arete Pharmacy Network, a pharmacy services administrative organization, are not included in this transaction.