Catamaran Corp. (CCT) surged to a record as the pharmacy benefits manager for drugstores boosted its full-year earnings forecast after agreeing to buy competitor Restat LLC for $409.5 million.
The shares rose 9.1 percent to C$59.03 in Toronto, the highest close since trading began in 1984, according to data compiled by Bloomberg. They have climbed 26 percent this year as the Standard & Poor’s/TSX Composite Index increased 1.3 percent.
Catamaran, based in Lisle, Illinois, raised its outlook for adjusted 2013 earnings per share to $1.87 to $1.92, from its May forecast of $1.81 to $1.88. The average of 22 analyst estimates compiled by Bloomberg was $1.84. The company cited the purchase of Milwaukee-based Restat and a 10-year partnership agreement with Cigna Corp. (CI) announced in June.
The acquisition of closely held Restat is expected to add about $650 million a year in drug spending and $45 million of annual earnings before interest, taxes, depreciation and amortization, Catamaran said. The transaction, slated to close in the fourth quarter, will be funded through a revolving credit line and cash on hand, the company said.
Catamaran today also reported second-quarter adjusted earnings of 49 cents a share, beating the 44-cent average of 20 analyst estimates compiled by Bloomberg. Revenue doubled to $3.38 billion, trailing the $3.46 billion average estimate.
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