Omnicare Draws Interest From CVS and Express ScriptsEd Hammond and Jeffrey McCracken
Omnicare Inc., a supplier of drugs to nursing homes, is drawing interest from potential buyers including Express Scripts Holding Co. and CVS Health Corp., people with knowledge of the matter said.
Initial bids for Omnicare, which has a market value of about $8.5 billion, are due in May, the people said, asking not to be identified discussing private information. Omnicare is working with Bank of America Corp. and Centerview Partners to explore options including a possible sale, the people said.
Potential bidders also include Walgreens Boots Alliance Inc. and McKesson Corp., the people said. For any of the potential buyers, Omnicare would offer a way to boost earnings and dividends, analysts have said. Omnicare climbed 1.8 percent to $87.98 at the close in New York.
Omnicare delivers drugs and helps senior-living facilities manage their residents’ medications. Demand for such pharmacy services is rising as patients, insurers and companies look for ways to manage costs with drug prices on the rise, and pharmacy-services providers are combining to gain a bigger piece of the growing market.
There is no certainty Omnicare will reach a deal with any of the bidders, one of the people cautioned. Representatives for CVS, Express Scripts, McKesson and Walgreens declined to comment.
A representative for Omnicare declined to comment, while spokesmen for Bank of America and Centerview didn’t immediately respond to requests for comment.
UnitedHealth Group Inc. agreed in March to buy Catamaran Corp. for about $13 billion, including net debt. In February, Rite Aid Corp. agreed to buy EnvisionRX from private-equity owner TPG for about $2 billion.
Express Scripts became the biggest pharmacy-benefits management company after purchasing Medco Health Solutions Inc. three years ago for $34 billion including net debt, in what is still the industry’s largest deal. CVS has the second-biggest market share.
Executives at Express Scripts said Wednesday they delayed a multibillion-dollar share buyback during the first quarter while the company looked at deals, without naming a potential target.