Creates a Leading Independent Provider of Home
and Alternate Site Infusion Services with Deep Clinical
Expertise and Broad Therapy Portfolio
BioScrip, Inc. (NASDAQ: BIOS) (“BioScrip”) and Option Care
Enterprises, Inc. (“Option Care”), the nation’s largest independent
providers of home and alternate treatment site infusion therapy
services, today announced that they have entered into a definitive
merger agreement. The combination is expected to create a leading
independent provider with the national reach, comprehensive therapy
offering and financial capacity to succeed in the attractive and
growing home and alternate site infusion services segment of the
$100 billion U.S. infusion market.
Under the terms of the merger agreement, BioScrip will issue new
shares to Option Care’s shareholder, which is owned by investment
funds affiliated with Madison Dearborn Partners, LLC (“MDP”) and
Walgreens Boots Alliance, Inc. (NASDAQ: WBA) (“WBA”), in an
all-stock transaction. Upon completion of the transaction, MDP
funds and WBA will beneficially own approximately 80% of the
combined publicly traded company on a fully diluted basis, with
current BioScrip shareholders holding the remainder. The combined
company’s common stock will continue to be listed on the Nasdaq
Global Market. The transaction has been unanimously approved by the
boards of directors of both BioScrip and Option Care.
The combined company will be led by Option Care Chief Executive
Officer John Rademacher and Option Care Chief Financial Officer
Mike Shapiro and will incorporate the best talent, processes and
systems from both Option Care and BioScrip. It also will have a
leading, independent clinical platform for delivering high-quality
infusion therapy to more patients across the United States and
providing superior outcomes for patients, payors and providers.
BioScrip President and Chief Executive Officer Daniel E. Greenleaf
will remain active in the combined company as a special advisor to
its Board of Directors.
Daniel E. Greenleaf, President and Chief Executive Officer of
BioScrip, commented, “This is a compelling and complementary fit of
two leading players in the U.S. infusion market. Together, we will
be able to provide a diverse set of life-improving and
cost-effective services to more patients across the United States.
Our expanded reach and broader array of offerings provide a key
competitive advantage at a time when the demand for home and
alternate site infusion services continues to grow. The BioScrip
Board and I believe our shareholders will have the compelling
opportunity to participate alongside Option Care’s experienced and
seasoned shareholders in the long-term potential and value creation
opportunities of the combined company.”
John Rademacher, Chief Executive Officer at Option Care, said,
“This transaction brings together two organizations and thousands
of employees dedicated to creating a best in class experience for
our patients and their families. Our goal is to constantly improve
the delivery of life-saving therapies and comprehensive care
management to the patients we have the privilege of serving. At the
center of both organizations is deep clinical expertise and a
passion to deliver extraordinary care. We believe combining our
unique assets and leading product portfolios will create a
powerful, independent platform that will enable delivery of
high-quality, cost effective solutions to providers across the
country and help facilitate the introduction of innovative new
therapies to the marketplace. As an independent provider, we will
retain the unique ability to deliver high-quality infusion therapy
in the patient-preferred and safer setting of the home or an
alternate site to every commercial and governmental payor.
“I am honored to lead the combined company and work with
BioScrip’s and Option Care’s talented and dedicated employees, who
share a strong commitment to delivering exemplary care that makes a
positive difference in people’s lives. I look forward to harnessing
the strengths of both of our organizations and industry-leading
teams to capitalize on the many growth opportunities this
combination creates to drive long-term value for all
stakeholders.”
Expected Benefits of the Transaction
- Improved, Cost-Effective Patient Care.
Utilizing clinical monitoring and reporting, the combined company’s
more than 2,900 skilled clinicians (pharmacists, pharmacy
technicians, nurses and dieticians) will develop personalized care
plans for patients and be able to provide ongoing quality care in
support of complex therapy regimens. With a best-in-class platform
that is national in scope, the combined company will also be
positioned as the partner of choice for pharmaceutical
manufacturers seeking innovative distribution channels and patient
support models to access the market. Together, BioScrip and Option
Care will cover 96% of the U.S. population, with facilities in 46
states and the ability to dispense and serve patients in all 50
states.
- Enhanced Scale and Therapy Offerings. The
combined company will merge BioScrip’s and Option Care’s
complementary portfolios and provide products that are currently
only available to one of the two businesses, such as Option Care’s
access to Cuvitru for the treatment of primary immunodeficiency and
Nuzyra™ for the treatment of adults with acute bacterial skin and
skin structure infections and community-acquired bacterial
pneumonia. The combined company’s expanded geographic coverage,
continued independence, leading quality offerings and comprehensive
clinical expertise will position it to be a preferred partner for
payors, providers, biopharma manufacturers and patients.
Furthermore, its enhanced scale will enable it to capture scale
efficiencies and create additional vectors of growth through new
product and service introductions.
- Powerful Growth Engine in Attractive Industry.
Home and alternate site infusion, which currently accounts for
approximately 12% of the $100 billion total U.S. infusion market,
is estimated to grow approximately 5-7% per year due to attractive
market dynamics, including the shift to value-based care that
improves clinical outcomes and delivers better results for payors
and providers as well. The combined company will have the financial
capacity and flexibility, scale and clinical offering diversity to
drive organic growth in chronic and acute therapies along with
generating growth through operational efficiencies, improved
performance in revenue cycle management and innovative new therapy
introductions. The combination of BioScrip and Option Care will
create a diversified business across payors, therapies and
geographies in which no existing payor will account for more than
11% of net revenue.
- Compelling Financial Benefits: The transaction
is expected to drive meaningful operating and supply chain
efficiencies, generating over $60 million in net synergies
forecasted to realize full run-rate within 24 months of the
transaction closing. These forecasted synergies and the combined
company’s enhanced scale with pro-forma 2018 revenue of more than
$2.6 billion are expected to enable top- and bottom-line growth.
Additionally, BioScrip and Option Care have secured committed
financing from Bank of America Merrill Lynch, funds affiliated with
Ares Management Corporation, and Goldman Sachs Merchant Banking
Division to refinance and simplify the combined company’s capital
structure, which is expected to have no near-term maturities, no
preferred equity and no financial maintenance covenant. The new
capital structure is expected to provide the combined company with
a materially lower pro-forma combined net leverage ratio, a lower
cost of capital, significant additional liquidity and a path for
continued deleveraging. The combined company will pursue a balanced
capital allocation strategy, continuing to invest in and enhance
patient experiences, as well as its people and services to drive
organic growth, while managing its debt profile and continuing to
de-lever in a disciplined fashion.
Shareholders and Management Focused on Driving Value
Creation
MDP, a leading private equity firm based in Chicago, has a long
and successful history investing in health care companies and
partnering with them to achieve growth and significant long-term
value appreciation. MDP’s notable health care investments include
Ikaria Inc., Sage Products, Sirona Dental Systems, Team Health and
VWR International. Option Care, formerly Walgreens Infusion
Services, has been an independent company since it was separated
from WBA in 2015 in a joint investment partnership between MDP
funds and WBA.
Timothy P. Sullivan, a Managing Director and Head of the MDP
Health Care team and a Director of Option Care, said, "We believe
this transaction provides significant shareholder value creation
potential and we are excited to remain a major shareholder
alongside Walgreens Boots Alliance in the combined company. John,
Mike and the joint leadership team bring operational expertise and
strong integration track records. Since separating from Walgreens,
we have made significant investments in people, process, technology
and facilities. This experience, combined with their commitment to
patient-centric care, should drive meaningful and long-term
shareholder value.”
Rademacher and Shapiro are seasoned health care professionals
with significant operational expertise and public company
experience. Rademacher has held various executive-level positions
at leading public healthcare companies, including Cardinal Health
where he served as President and General Manager for both the
Ambulatory Care Division and the Nuclear and Pharmacy Services
Divisions, and at Cigna Corporation where he served as President of
CareAllies and Chief Operating Officer for the CIGNA Behavioral
Health business. Shapiro served as the Senior Vice President and
Chief Financial Officer for Catamaran Corporation, a
publicly-traded pharmacy benefits manager, and led the successful
process through which the company was sold to UnitedHealth Group.
He also had a longstanding career with Baxter International,
holding several financial positions across several businesses and
corporate functions.
Rademacher has spearheaded Option Care’s Zenith 20/20 program,
which changed the company’s operating model, implementing
technology, operational design and facility upgrades throughout the
organization. Under his leadership, Option Care has focused on
providing high-quality care and improving delivery of services to
patients, payors and manufacturers. The combined company, its
employees and all stakeholders are expected to benefit from a
leadership team focused on creating a culture that connects its
clinical expertise and company success to patient outcomes.
In addition to Rademacher and Shapiro, the combined company’s
leadership will draw from the experienced teams of both Option Care
and BioScrip.
The transaction, which is expected to be completed in the second
half of 2019, is subject to the satisfaction of customary closing
conditions, including regulatory approvals and approval by BioScrip
shareholders.
Conference Call, Webcast and Presentation
BioScrip and Option Care will host a conference call at 9:00 AM
ET today, March 15, 2019, to discuss the transaction. The dial-in
numbers for the call are (877) 423-9820 (U.S. Toll Free) or (201)
493-6749 (International). A live webcast of the conference call and
associated presentation materials will be available under the
“Investors” section of BioScrip’s web site at:
www.bioscrip.com.
An online replay of the conference call will be available
approximately two hours after completion of the conference call in
the Investor Relations section of BioScrip’s web site at:
www.bioscrip.com.
Advisors
In connection with the transaction, Jefferies LLC and Moelis
& Company LLC are acting as joint financial advisors to
BioScrip, and Gibson, Dunn & Crutcher LLP is serving as legal
advisor. Goldman Sachs & Co. LLC and BofA Merrill Lynch are
acting as financial advisors and Kirkland & Ellis LLP is acting
as legal advisor to Option Care.
FORWARD LOOKING STATEMENTSThis communication,
in addition to historical information, contains “forward-looking
statements” (as defined in the Private Securities Litigation Reform
Act of 1995) regarding, among other things, future events or the
future financial performance of BioScrip and Option Care. All
statements other than statements of historical facts are
forward-looking statements. In addition, words such as
“anticipate,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “seek,” “should,” “target,” “will,” “would,”
or the negative of these words, and words and terms of similar
substance used in connection with any discussion of future plans,
actions or events identify forward-looking statements.
Forward-looking statements relating to the proposed transaction
include, but are not limited to: statements about the benefits of
the proposed transaction between BioScrip and Option Care,
including future financial and operating results; BioScrip’s and
Option Cares plans, objectives, expectations and intentions; the
expected timing of completion of the proposed transaction; and
other statements relating to the acquisition that are not
historical facts. Forward-looking statements are based on
information currently available to BioScrip and Option Care and
involve estimates, expectations and projections. Investors are
cautioned that all such forward-looking statements are subject to
risks and uncertainties (both known and unknown), and many factors
could cause actual events or results to differ materially from
those indicated by such forward-looking statements. With respect to
the proposed transaction between BioScrip and Option Care, these
factors could include, but are not limited to: the risk that
BioScrip or Option Care may be unable to obtain governmental and
regulatory approvals required for the transaction, or that required
governmental and regulatory approvals may delay the transaction or
result in the imposition of conditions that could reduce the
anticipated benefits from the proposed transaction or cause the
parties to abandon the proposed transaction; the risk that a
condition to closing of the transaction may not be satisfied; the
length of time necessary to consummate the proposed transaction,
which may be longer than anticipated for various reasons; the risk
that the businesses will not be integrated successfully; the risk
that the cost savings, synergies and growth from the proposed
transaction may not be fully realized or may take longer to realize
than expected; the diversion of management time on
transaction-related issues; the effect of future regulatory or
legislative actions on the companies or the industries in which
they operate; the risk that the credit ratings of the combined
company or its subsidiaries may be different from what the
companies expect; economic and foreign exchange rate volatility;
and the other risks contained in BioScrip’s most recently filed
Annual Report on Form 10-K.
Many of these risks, uncertainties and assumptions are beyond
BioScrip’s ability to control or predict. Because of these risks,
uncertainties and assumptions, you should not place undue reliance
on these forward-looking statements. Furthermore, forward-looking
statements speak only as of the information currently available to
the parties on the date they are made, and neither BioScrip nor
Option Care undertakes any obligation to update publicly or revise
any forward-looking statements to reflect events or circumstances
that may arise after the date of this communication. Nothing in
this communication is intended, or is to be construed, as a profit
forecast or to be interpreted to mean that earnings per BioScrip
share for the current or any future financial years or those of the
combined company, will necessarily match or exceed the historical
published earnings per BioScrip share, as applicable. Neither
BioScrip nor Option Care gives any assurance (1) that either
BioScrip or Option Care will achieve its expectations, or (2)
concerning any result or the timing thereof, in each case, with
respect to any regulatory action, administrative proceedings,
government investigations, litigation, warning letters, consent
decrees, cost reductions, business strategies, earnings or revenue
trends or future financial results. All subsequent written and oral
forward-looking statements concerning BioScrip, Option Care, the
proposed transaction, the combined company or other matters and
attributable to BioScrip or Option Care or any person acting on
their behalf are expressly qualified in their entirety by the
cautionary statements above.
ADDITIONAL INFORMATION AND WHERE TO FIND
ITBioScrip, Inc. (“BioScrip” or the “Company”) will file
with the Securities and Exchange Commission (“SEC”) a proxy
statement in connection with the proposed transaction. The
proxy statement will contain important information about the
proposed transaction and related matters. INVESTORS AND
SECURITY HOLDERS ARE URGED AND ADVISED TO READ THE PROXY STATEMENT
WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. The proxy statement and other relevant materials
(when they become available) and any other documents filed by the
Company with the SEC may be obtained free of charge at the SEC’s
website, at www.sec.gov. In addition, security holders will
be able to obtain free copies of the proxy statement and other
relevant materials from the Company by contacting Investor
Relations by mail at 1600 Broadway, Suite 700, Denver, CO 80202,
Attn: Investor Relations, by telephone at (720) 697-5200, or by
going to the Company’s Investor Relations page on its corporate web
site at https://investors.bioscrip.com.
PARTICIPANTS IN THE SOLICITATIONThe Company and
its directors and executive officers may be deemed to be
participants in the solicitation of proxies from stockholders in
connection with the matters discussed above. Information about the
Company’s directors and executive officers is set forth in the
Proxy Statement on Schedule 14A for the Company’s 2018 annual
meeting of stockholders, which was filed with the SEC on April 4,
2018. This document can be obtained free of charge from the
sources indicated above. Information regarding the ownership
of the Company’s directors and executive officers in the Company’s
securities is included in the Company’s SEC filings on Forms 3, 4,
and 5, which can be found through the SEC’s website at
www.sec.gov. Other information regarding the participants in
the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be
contained in the preliminary proxy statement and the definitive
proxy statement and other relevant materials to be filed with the
SEC when they become available.
About BioScrip, Inc.BioScrip, Inc. is one of
the largest independent national providers of infusion and home
care management solutions, with approximately 2,100 teammates and
nearly 70 service locations across the U.S. BioScrip partners with
physicians, hospital systems, payors, pharmaceutical manufacturers
and skilled nursing facilities to provide patients access to
post-acute care services. BioScrip operates with a commitment to
bring customer-focused pharmacy and related healthcare infusion
therapy services into the home or alternate-site setting. By
collaborating with the full spectrum of healthcare professionals
and the patient, BioScrip provides cost-effective care that is
driven by clinical excellence, customer service, and values that
promote positive outcomes and an enhanced quality of life for those
it serves.
About Option CareOption Care Enterprises, Inc.
(Option Care) is one of the nation’s largest and most trusted
providers of home and alternate treatment site infusion services.
Holding accreditations from industry quality organizations ACHC,
PCAB, ASHP and URAC,* the company draws on nearly 40 years of
clinical care experience to offer patient-centered therapy
management. Option Care’s signature Home Infusion Plus services
include the clinical management of infusion medicines, nursing
support and care coordination. Option Care’s multidisciplinary team
of more than 1,800 clinicians – including pharmacists, nurses and
dietitians – are able to provide home infusion service coverage for
nearly all patients across the United States needing treatment for
complex and chronic conditions. Learn more at
www.OptionCare.com.
BioScrip ContactsStephen DeitschChief Financial
Officer & TreasurerT: (720)
697-5200Stephen.deitsch@BioScrip.com
Kalle Ahl, CFAThe Equity GroupT: (212)
836-9614kahl@equityny.com
Option Care ContactsChuck Dohrenwend, Kate
Murray or Melissa GanslerAbernathy MacGregorT: (212)
371-5999cod@abmac.com; ksm@abmac.com; mlg@abmac.com
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