Cencora, Inc. (NYSE: COR) today announced that it has entered
into a definitive agreement to acquire Retina Consultants of
America (“RCA”), a leading management services organization (MSO)
of retina specialists, from Webster Equity Partners.
“The acquisition of RCA will allow Cencora to broaden our
relationships with community providers in a high growth segment and
build on our leadership in specialty,” said Bob Mauch, President
& CEO of Cencora. “With a compelling value proposition for
physicians, an impressive leadership team and strong clinical
research capabilities, RCA is well-positioned at the forefront of
retinal care. We intend to use our leading operational
infrastructure to help RCA enhance the provider experience, drive
innovative new research and create better outcomes for patients.
Following our recent investment in OneOncology, the addition of RCA
will allow us to expand our MSO solutions and drive differentiated
value across the healthcare system for manufacturers, providers and
patients.”
“We are pleased to enter our next phase of growth with the
support of a leading global pharmaceutical solutions organization,”
said Robby Grabow, Chief Executive Officer of RCA. “With additional
resources to support the continued execution of our growth
strategy, we will be better positioned to continue expanding our
physician network and enhancing the quality of care we
provide.”
“The ability to become a part of Cencora and its purpose-driven
culture, will further advance RCA’s mission of saving sight and
improving the lives of our patients and communities we serve
through innovation,” said David Brown, MD, Co-Chair of RCA’s
Medical Leadership Board. “Our cultural alignment and shared focus
on driving innovation will allow us to unlock new opportunities
together and advance the caliber of retina care.”
The proposed transaction will build on Cencora’s key strategic
imperatives and areas of focus by:
- Adding a leader in the community provider space to
Cencora: RCA is the leading MSO in the retina space and a
trusted healthcare provider. RCA’s nearly 300 retina specialists
across 23 states provide high-quality care to patients with
physicians conducting over 2 million visits annually.
- Expanding Cencora’s leadership in Specialty: As the
specialty landscape continues to evolve, providers are increasingly
seeking partners to assist with managing their practices while
retaining their autonomy and patient-centric approach. The addition
of RCA will add to Cencora’s capabilities in Specialty and expand
its MSO business, broadening physician and manufacturer
relationships as well as Cencora’s value proposition to all its
stakeholders.
- Investing in innovation and contributing to Rx
outcomes: RCA has an impressive clinical track record and
operates a premier clinical research network with 40 clinical trial
sites spanning Phases I-IV and 400 dedicated full-time research
employees. Cencora expects to use its suite of manufacturer
services to enhance RCA’s research program and outcomes,
maintaining its position as a partner of choice to pharmaceutical
innovators in the retina space.
Transaction Details
Cencora will acquire RCA for approximately $4.6 billion in cash,
subject to a customary working capital and net-debt adjustment.
RCA’s affiliated practices, physicians and management will retain a
minority interest in RCA, with Cencora holding approximately 85%
ownership in RCA upon closing. Additionally, Cencora will
potentially pay up to $500 million in aggregate contingent
consideration in fiscal year 2027 and fiscal year 2028, subject to
the successful completion of certain predefined business
objectives.
The transaction is subject to the satisfaction of customary
closing conditions, including receipt of required regulatory
approvals.
Upon closing, the acquisition of RCA is expected to be
approximately $0.35 accretive, net of estimated financing costs, to
Cencora’s adjusted diluted EPS (a non-GAAP financial measure
defined herein) for its first twelve months. Cencora plans to fund
the transaction through a combination of existing cash on hand and
new debt financing. Cencora’s fiscal year 2025 guidance does not
currently include the impact of the RCA acquisition, which will be
incorporated into expectations following the transaction close.
“Cencora is committed to maintaining its strong investment grade
credit rating and will prioritize de-leveraging in the years
following transaction close,” said Jim Cleary, EVP & Chief
Financial Officer.
Advisors
Lazard is serving as exclusive financial advisor, and
Freshfields LLP, Sidley Austin LLP and Morgan, Lewis & Bockius
LLP are serving as legal advisors to Cencora. Goldman Sachs &
Co. LLC and Rothschild & Co are serving as financial advisors,
and Goodwin Procter LLP and ReedSmith LLP are serving as legal
advisors to RCA.
About Cencora
Cencora is a leading global pharmaceutical solutions
organization centered on improving the lives of people and animals
around the world. Cencora partners with pharmaceutical innovators
across the value chain to facilitate and optimize market access to
therapies. Care providers depend on Cencora for the secure,
reliable delivery of pharmaceuticals, healthcare products, and
solutions. Cencora’s 46,000+ worldwide team members contribute to
positive health outcomes through the power of Cencora’s purpose:
Cencora is united in its responsibility to create healthier
futures. Cencora is ranked #10 on the Fortune 500 and #24 on the
Global Fortune 500 with more than $290 billion in annual revenue.
Learn more at investor.cencora.com.
About Webster Equity
Partners
Founded in 2003, Webster is a private equity firm that focuses
on high impact growth strategies that seek to deliver optimal
outcomes for its investors, portfolio companies and the communities
that it serves. Its mission is to deliver superior returns to our
partners through the investment in and development of purpose
driven patient-centric healthcare organizations dedicated to
providing best of class clinical care and service to their
patients. (https://websterequitypartners.com/)
Cencora’s Cautionary Note Regarding Forward-Looking
Statements
Certain of the statements contained in this press release are
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Securities
Exchange Act”). Such forward-looking statements may include,
without limitation, statements about the proposed transaction with
RCA, the expected timetable for completing the proposed
transaction, the benefits of the proposed transaction, future
opportunities for Cencora and RCA and any other statements
regarding Cencora’s or RCA’s future operations, financial or
operating results, anticipated business levels, future earnings,
planned activities, anticipated growth, market opportunities,
strategies, and other expectations for future periods. Words such
as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,”,
“estimate,” "expect," “intend,” “may,” “might,” “on track,”
“opportunity,” “plan,” “possible,” “potential,” “predict,”
“project,” “seek,” “should,” “strive,” “sustain,” “synergy,”
“target,” “will,” “would” and similar expressions are intended to
identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking. Because
forward-looking statements inherently involve risks and
uncertainties, actual future results may differ materially from
those expressed or implied by such forward-looking statements.
Factors that could cause or contribute to such differences include,
but are not limited to: the parties’ ability to meet expectations
regarding the timing of the proposed transaction; the parties’
ability to consummate the proposed transaction; the regulatory
approvals required for the proposed transaction not being obtained
on the terms expected or on the anticipated schedule or at all;
inherent uncertainties involved in the estimates and judgments used
in the preparation of financial statements and the providing of
estimates of financial measures, in accordance with GAAP and
related standards, or on an adjusted basis; Cencora’s or RCA’s
failure to achieve expected or targeted future financial and
operating performance and results; the possibility that Cencora may
be unable to achieve expected benefits, synergies and operating
efficiencies in connection with the proposed transaction within the
expected time frames or at all; business disruption being greater
than expected following the proposed transaction; the recruiting
and retention of key physicians and employees being more difficult
following the proposed transaction; the effect of any changes in
customer and supplier relationships and customer purchasing
patterns; the impacts of competition; changes in the economic and
financial conditions of the business of Cencora or RCA; Cencora's
de-leveraging plans and the ability of Cencora to maintain its
investment grade rating; and uncertainties and matters beyond the
control of management and other factors described under “Risk
Factors” in Cencora’s Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and other filings with the SEC. You can access
Cencora’s filings with the SEC through the SEC website at
www.sec.gov or through Cencora’s website, and Cencora strongly
encourages you to do so. Except as required by applicable law,
Cencora undertakes no obligation to update any statements herein
for revisions or changes after the date of this communication.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities of Cencora. Any such
offer will only be made pursuant to a prospectus filed with the SEC
or pursuant to one or more exemptions from the registration
requirements of the Securities Act of 1933, as amended.
Supplemental Information Regarding
Non-GAAP Financial Measure
To supplement the financial measures prepared in accordance with
U.S. generally accepted accounting principles (GAAP), Cencora uses
the non-GAAP financial measure described below. The non-GAAP
financial measure should be viewed in addition to, and not in lieu
of, financial measures calculated in accordance with GAAP. This
supplemental measure may vary from, and may not be comparable to,
similarly titled measures by other companies.
The non-GAAP financial measure is presented because Cencora’s
management uses non-GAAP financial measures to evaluate Cencora’s
operating performance, to perform financial planning, and to
determine incentive compensation. Therefore, Cencora believes that
the presentation of the non-GAAP financial measure provides useful
supplementary information to, and facilitates additional analysis
by, investors. The presented non-GAAP financial measure excludes
items that management does not believe reflect Cencora’s core
operating performance because such items are outside the control of
Cencora or are inherently unusual, non-operating, unpredictable,
non-recurring, or non-cash.
Cencora does not provide a reconciliation for this non-GAAP
financial measure on a forward-looking basis to the most comparable
GAAP financial measure on a forward-looking basis because it is
unable to provide a meaningful or accurate calculation or
estimation of reconciling items and the information is not
available without unreasonable effort due to the uncertainty and
potential variability of reconciling items, which are dependent on
future events, are out of Cencora’s control and/or cannot be
reasonably predicted, and the probable significance of which cannot
be determined.
This press release includes adjusted diluted earnings per share
(“EPS”), which represents diluted earnings per share determined in
accordance with GAAP adjusted for specific items, including the per
share impact of: gains from antitrust litigation settlements;
Turkey highly inflationary impact; LIFO expense (credit);
acquisition-related intangibles amortization; litigation and opioid
expenses (credit); acquisition-related deal and integration
expenses; restructuring and other expenses; impairment of goodwill;
the gain on the divestiture of non-core businesses; the gain (loss)
on the currency remeasurement related to 2020 Swiss tax reform; and
the gain (loss) on the remeasurement of an equity investment, in
each case net of the tax effect calculated using the applicable
effective tax rate for those items. In addition, the per share
impact of certain discrete tax items primarily attributable to an
adjustment of a foreign valuation allowance, and the per share
impact of certain expenses related to 2020 Swiss tax reform are
also excluded from adjusted diluted earnings per share. Cencora’s
management believes that this non-GAAP financial measure is useful
to investors because it eliminates the per share impact of items
that are outside the control of Cencora that are not considered to
be indicative of ongoing operating performance due to their
inherent unusual, non-operating, unpredictable, non-recurring, or
non-cash nature.
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version on businesswire.com: https://www.businesswire.com/news/home/20241105587321/en/
Investors: Bennett S. Murphy 610-727-3693
Bennett.Murphy@cencora.com Media: Lauren
Esposito 215-460-6981
Lauren.Esposito@cencora.com
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