Rite Aid Corp. (RAD) announced that it would acquire private equity-backed Envision Pharmaceutical Holdings Inc. for $2 billion, following rival CVS Health Corp. into the pharmacy-benefit manager business. Terms of the deal call for Camp Hill, Pa.-based Rite Aid to pay $1.8 billion in cash and $200 million in stock for Envision, which is owned by TPG Capital LP. Rite Aid will issue about 27.9 million of its shares to complete the deal. Twinsburg, Ohio-based Envision provides pharmacy benefit management services including claims processing, formulary management, mail-order delivery, benefit-design consulting and related services. The company, according to Rite Aid, should generate 2015 Ebitda of between $150 million and $160 million on sales of $5 billion. Rite Aid, which operates 4,569 retail locations in 31 states and the District of Columbia, said the purchase would open up a new stream of revenue for the company. The acquisition of EnvisionRx meaningfully expands our health and wellness offerings, enhancing our ability to provide a higher level of care to the patients and communities we serve, company chairman and CEO John Standley said in a statement. “With the addition of EnvisionRx, we will create a compelling pharmacy offering across retail, specialty and mail-order channels, enabling us to deliver cost-effective solutions to employers and health plans while driving growth and creating long-term value for our shareholders.” The company is following in the footsteps of CVS, which bought Caremark Rx Inc. in 2007 and ranks as one of the largest pharmacy-benefit managers in the U.S. At CVS, the benefits management business enjoys higher margins than the retail unit.
Market Pulse transactions shown herein are provided as a matter of public record. These transactions have been compiled from press releases, corporate announcements and other public sources to provide an overview of acquisition and merger activities within the healthcare and life sciences sectors.