- Board Authorizes $1.0 Billion Share Repurchase Authorization,
Including $400 Million Accelerated Share Repurchase (ASR)
Transaction
- Company Will Seek Partners to Take Ownership of Some or All of
Premier’s Holdings in Contigo Health and S2S Global
Premier, Inc. (NASDAQ: PINC) (“Premier” or the “Company”), a
leading technology-driven healthcare improvement company, today
announced that the Company’s Board of Directors has concluded its
exploration of strategic alternatives.
As previously announced in May 2023, the Board established an
Independent Special Committee (the “Special Committee”) to
identify, review and explore strategic alternatives to enhance
value for stockholders. In consultation with its financial and
legal advisors, the Special Committee conducted a comprehensive
review of a broad range of potential options, providing its
recommendations to the full Board for approval.
In July 2023, the Board approved Premier’s divestiture of its
non-healthcare group purchasing organization (GPO) operations to
unlock substantial value for Premier’s stockholders and enhance the
Company’s focus on its healthcare businesses.
Share Repurchase Authorization and ASR Transaction
The Board and management team considered opportunities for
deploying the Company’s capital resources, including accelerating
returns to stockholders. Based on this review, the Board has
approved a new $1.0 billion share repurchase authorization.
Repurchases of Premier’s Class A common stock (“common stock”)
under the share repurchase authorization may occur from time to
time through June 30, 2025, in open market purchases, privately
negotiated transactions, accelerated or other structured repurchase
programs or other means, subject to compliance with applicable
securities laws and other legal requirements.
Under the share repurchase authorization, the Company has
entered into an accelerated share repurchase agreement with Bank of
America to repurchase an aggregate of $400 million of common stock
(the “ASR transaction”). Under the terms of the ASR transaction,
the Company will make a payment totaling $400 million to Bank of
America, and by February 9, 2024, will receive from Bank of America
initial deliveries of approximately $320 million in common stock
based on the closing price on February 7, 2024. The final
settlement of the ASR transaction is expected to be completed in
the first quarter of the Company’s 2025 fiscal year.
The timing, volume and manner of other repurchases, if any, will
be determined based on market conditions, the market price of the
common stock, applicable legal requirements, potential alternative
opportunities for investment of capital and other factors. The
authorization as approved by the Board does not require Premier to
repurchase any specific number of shares of common stock and may be
modified, suspended or discontinued at any time without notice.
Premier expects to fund repurchases under the program using cash on
hand and available borrowings under the Company’s existing credit
facility.
“Premier is a true industry leader, built on a strong core
business rooted in supply chain expertise and a world-class,
AI-enabled technology platform that provides members with
actionable intelligence for continuous improvement in cost, quality
and operational efficiencies,” said Richard J. Statuto, Chair of
the Board. “We remain confident in our business, operating strategy
and the value-creation opportunities ahead. The Board and
management team are committed to maintaining a disciplined approach
to capital allocation, and Premier’s balance sheet provides ample
flexibility to return capital to stockholders while also investing
in the Company’s growth. The ASR transaction and ability to pursue
additional opportunistic share repurchases demonstrate the Board’s
conviction in Premier’s prospects and underscore our commitment to
delivering superior returns for stockholders.”
Potential Partners to Take Ownership of Some or All of
Premier’s Holdings in Contigo Health and S2S Global
As part of its review process, the Board, in consultation with
management, also authorized the Company to seek partners for some
or all of Premier’s holdings in Contigo Health, a subsidiary
focused on providing comprehensive services that optimize employee
health benefits; and S2S Global, a direct sourcing subsidiary.
“After a thorough review of alternatives, we are excited to move
forward with a more focused strategy predicated on automating and
streamlining all aspects of the supply chain and leveraging our
unique data, technologies and AI capabilities to support provider
performance improvement and growth in certain adjacent markets,”
said Michael J. Alkire, Premier’s President and CEO. “Against the
backdrop of shifting industry dynamics – including a growing
healthcare labor shortage, aging population and ongoing supply
chain challenges – Premier’s solutions are more relevant and in
demand than ever before. While we are sharpening our focus on our
capabilities to best serve our members and other customers, we
intend to find the right partners for our Contigo and S2S
businesses to help take them to new heights. We are confident this
is the right path forward to drive profitable growth and
sustainable value creation for Premier, our stockholders, members
and other stakeholders.”
About Premier, Inc.
Premier, Inc. (NASDAQ: PINC) is a leading healthcare improvement
company, uniting an alliance of more than 4,350 U.S. hospitals and
health systems and approximately 300,000 other providers and
organizations to transform healthcare. With integrated data and
analytics, collaboratives, supply chain solutions, and consulting
and other services, Premier enables better care and outcomes at a
lower cost. Premier plays a critical role in the rapidly evolving
healthcare industry, collaborating with members to co-develop
long-term innovations that reinvent and improve the way care is
delivered to patients nationwide. Headquartered in Charlotte, N.C.,
Premier is passionate about transforming American healthcare.
Please visit Premier’s news and investor sites on
www.premierinc.com, as well as X, Facebook, LinkedIn, YouTube,
Instagram and Premier’s blog for more information about the
company.
Cautionary Note Regarding Forward-Looking Statements
Statements made in this release that are not statements of
historical or current facts are “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. The forward-looking statements in this release include, but
are not limited to those related to: Premier’s ability to advance
its long-term strategies and develop innovations for and transform
healthcare; Premier’s ability to identify partners for its S2S
Global and Contigo Health businesses, and the potential benefits
thereof to Premier, its business, financial condition, or financial
results; the potential for share repurchases pursuant to the share
repurchase authorization, the ability to fund those share
repurchases, and the potential benefits thereof; and the ability to
complete the ASR transaction, the number of shares of common stock
purchased pursuant to that transaction, the expected completion
date, and the potential benefits thereof, all of which could be
affected by volatility or disruptions in the capital markets or
other factors. Forward-looking statements may involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of Premier to be
materially different from historical results or from any future
results or projections expressed or implied by such forward-looking
statements. Accordingly, readers should not place undue reliance on
any forward-looking statements. In addition to statements that
explicitly describe such risks and uncertainties, readers are urged
to consider statements in the conditional or future tenses or that
include terms such as “believes,” “belief,” “expects,” “estimates,”
“intends,” “anticipates” or “plans” to be uncertain and
forward-looking. Forward-looking statements may include comments as
to Premier’s beliefs and expectations as to future events and
trends affecting its business and are necessarily subject to
uncertainties, many of which are outside Premier’s control. More
information on risks and uncertainties that could affect Premier’s
business, achievements, performance, financial condition, and
financial results is included from time to time in the “Cautionary
Note Regarding Forward-Looking Statements,” “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections of Premier’s periodic and current
filings with the SEC, including those discussed under the “Risk
Factors” and “Cautionary Note Regarding Forward-Looking Statements”
section of Premier’s Form 10-K for the year ended June 30, 2023 and
subsequent Quarterly Reports on Form 10-Q, including the Form 10-Q
for the quarter ended December 31, 2023, expected to be filed with
the SEC shortly after the date of this release, all of which are
made available on Premier’s website at investors.premierinc.com.
Forward-looking statements speak only as of the date they are made,
and Premier undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information or future events that occur after that date, or
otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240205199165/en/
Investor Contact: Ben Krasinski Senior Director, Investor
Relations 704.816.5644 ben_krasinski@premierinc.com
Media Contact: Amanda Forster Vice President, Public
Relations 202.879.8004 amanda_forster@premierinc.com
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