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Pharm firms in $222M deal
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August 8, 1997: 2:43 p.m. ET
Omnicare acquires American Medserve, will focus on the elderly
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NEW YORK (CNNfn) - Pharmacy services concern Omnicare Inc. announced Friday it will acquire American Medserve Corp. for $222.6 million.
The deal is another in a long string of mergers that have hit the healthcare industry in 1997. Omnicare will pay $18 a share for all outstanding issues of American Medserve and assume $11.6 million in debt, the company said.
The deal will allow the companies "to capitalize on the major growth opportunities in in geriatric pharmaceutical care," said Joel Gemunder, president of Omnicare.
Analysts said companies like Omnicare are combining operations in order to jumpstart growth and wield more influence amid skyrocketing healthcare costs.
"They're consolidating to gain critical mass," said Tom Shea, an analyst with Forum Capital Markets.
Other recent healthcare deals include Laidlaw Inc.'s purchase of EmCare Holdings Inc. for $400 million; Vencor Inc.'s acquisition of Transitional Hospitals Corp. for $639 million; and Genesis Health Ventures Inc. pairing with two investment companies to buy Multicare Companies for $1.4 billion.
Omnicare, based in Cincinnati, provides professional pharmacy and consulting services for more than 4,400 long-term care facilities such as nursing homes and retirement centers.
American Medserve, headquartered in Naperville, Ill., provides pharmacy and related services at 720 long-term care facilities in 11 states. Based on revenues for the quarter ended 31, annualized revenue is about $144 million.
The acquisition will put Omnicare in six new states and broaden its pharmacies in New York, Illinois and Pennsylvania.
Omnicare's stock (OCR) was down 7/16 to 30-3/16 in mid-afternoon trading on the New York Stock Exchange. American Medserve stock (AMCI) was up 2-1/16 to 17-9/16 on the Nasdaq market.
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