Combination with Home Solutions Adds Experienced
and Proven Leadership Team
BioScrip, Inc. (NASDAQ:BIOS) (“BioScrip” or the “Company”), a
leading national provider of infusion and home care management
solutions, today announced that it has entered into an agreement to
acquire the business of HS Infusion Holdings, Inc. (“Home
Solutions”), in a highly synergistic, transformational and
accretive transaction with significant benefits for all
stakeholders. Based in Hammonton, New Jersey, Home Solutions is a
leading provider of home infusion and home nursing products and
services to patients suffering from chronic and acute medical
conditions. Home Solutions is a privately held company whose
principal shareholder is KRG Capital Partners LLC.
Under the terms of the transaction, BioScrip
will acquire substantially all of the assets and assume certain
liabilities of Home Solutions and its subsidiaries for total
transaction consideration of $85.0 million at closing (the “Closing
Consideration”) and additional contingent consideration in the form
of restricted stock units (“RSUs”) (the “Contingent
Consideration”).
The Closing Consideration will consist of $80.0
million payable in cash, subject to certain adjustments and $5.0
million in shares of the Company’s common stock. The Contingent
Consideration will consist of restricted shares of BioScrip common
stock, issued in two tranches with different vesting conditions.
The number of RSUs in Tranche A and Tranche B is approximately 3.1
million and 2.475 million, respectively. The RSUs would vest in two
tranches when BioScrip shares exceed 20-day average trading prices
of $4.00 per share and $5.00 per share, respectively, subject to
certain time restrictions and under certain circumstances, in the
event of a change of control.
In 2015, BioScrip and Home Solutions generated
revenue of $982 million and $109 million, respectively. On a pro
forma basis, the combined company is expected to generate over $1
billion in revenue. The transaction is expected to be accretive to
BioScrip’s financial results and is estimated to generate $14-17
million of synergies approximately 12-18 months following the
closing. The operating synergies are primarily related to supply
chain efficiencies, infrastructure optimization and other corporate
and organizational improvements.
The additional financial contribution from Home
Solutions, including anticipated synergies, is expected to
strengthen the Company’s balance sheet and leverage profile,
thereby improving BioScrip’s strategic flexibility and competitive
positioning and realigning the Company as a growth platform in the
attractive post-acute care segment.
The combination of BioScrip and Home Solutions
brings together two highly complementary core infusion services
portfolios that will have greater scale and financial resources.
Home Solutions is one of the largest independent home infusion
providers in the country, with branches that span across the East
Coast. For full year 2015, core revenue increased 8.3% and core
admits increased 12.0%, both over the prior year period.
The combined company will have an enhanced
national presence, providing expanded core infusion services for
patients and benefitting from additional payor relationships. The
addition of Home Solutions will enhance BioScrip’s revenue mix and
margins, as Home Solutions’ revenues from core infusion therapies
represented 81% of total gross revenues at the end of 2015.
Carter Pate, Chairman of BioScrip, said, “This highly compelling
transaction will deliver meaningful benefits to our stakeholders
and position the company extraordinarily well for future growth and
strategic opportunities. We are energized by this combination and
for the shared benefit of our patient-focused organizations. I also
wish to thank Rick Smith for his leadership and his significant
contributions to both BioScrip and the Home Infusion Industry. I
look forward to continuing to work with Rick, Dan and the Board to
grow the business and drive value.”
Daniel Greenleaf, Chairman and Chief Executive Officer of Home
Solutions, said, “This transaction is a terrific opportunity to
combine with a complementary infusion services company that shares
our passion and commitment for providing national reach and local
care. Together we will be able to further deliver on our shared
mission of providing cost-effective care that is driven by clinical
excellence, customer service, and values that promote positive
outcomes and an enhanced quality of life for patients. I appreciate
Rick’s partnership and friendship, as well as the support of Carter
and the entire Board as we deliver value to shareholders by
building the largest independent home infusion provider.”
Leadership
Upon completion of the transaction, Daniel Greenleaf will become
Chief Executive Officer of BioScrip and join the Company’s Board.
At that time, Rick Smith, Director and Chief Executive Officer of
BioScrip will become Vice Chairman of the Board of Directors.
Mr. Greenleaf has over two decades of relevant experience in
senior leadership positions in the healthcare industry. Prior to
serving as Chairman and CEO of Home Solutions, Mr. Greenleaf served
as President and Chief Executive Officer of Coram Specialty
Infusion Services and led Coram to become the industry leader in
home infusion and one of the top-performing healthcare companies in
the U.S. with approximately $1.2 billion in revenue, approximately
5,000 employees and nearly 85 locations. While serving as President
and Chief Executive Officer of Coram, Mr. Greenleaf assumed
responsibility as Chief Operating Officer of Coram’s parent
company, Apria Healthcare Group Inc., which had approximately $2.2
billion in revenue, approximately 13,000 employees and 600
locations. Coram, which was originally purchased by Apria for $350
million, was later sold by Apria’s private equity owner, The
Blackstone Group, to CVS Caremark (currently, CVS Health Corp) for
$2.1 billion, which underscores the value created for Coram’s Home
Infusion platform during Mr. Greenleaf’s tenure at Coram. Prior to
his roles at Coram and Apria, Mr. Greenleaf served as President and
CEO of VioQuest Pharmaceuticals Inc. and held leadership roles with
Celltech Biopharmaceuticals, Nabi Pharmaceuticals and
Schering-Plough Corporation.
Jeffrey Kreger, Chief Financial Officer of BioScrip, will serve
as the combined company’s Chief Financial Officer and
Treasurer.
BioScrip will continue to be headquartered in Denver, Colorado
and plans to maintain branches throughout the United States, and
maintain Home Solutions’ Hammonton, New Jersey billing and
operations center.
Richard Smith, Chief Executive Officer of BioScrip, said, “We
are excited to bring together our two complementary companies, both
of which have tremendously talented teams, and to expand on the
premier quality-of-care we provide to individuals who require home
infusion services. We look forward to welcoming Dan and the Home
Solutions team and expect a seamless integration.”
Transaction Financing, Timing and Approvals
The transaction is anticipated to be financed through the net
proceeds from an equity offering to be initiated promptly under the
Company’s existing shelf registration statement, subject to market
conditions. Any excess proceeds from the offering following the
acquisition will be primarily used to reduce BioScrip’s outstanding
indebtedness.
The transaction, which is expected to close in the third quarter
of 2016, is subject to receipt of necessary regulatory approvals, a
financing contingency and approval of certain matters by BioScrip
shareholders, as well as customary closing conditions.
Advisors
Jefferies LLC is acting as financial advisor to BioScrip.
Polsinelli PC, Dechert LLP and Gibson, Dunn & Crutcher LLP are
acting as legal advisors to BioScrip. Houlihan Lokey is acting as
financial advisor to Home Solutions and Ropes & Gray LLP is
acting as legal advisor.
ABOUT BIOSCRIP
BioScrip, Inc. is a leading national provider of infusion and
home care management solutions. BioScrip partners with physicians,
hospital systems, skilled nursing facilities, healthcare payors,
and pharmaceutical manufacturers to provide patients access to
post-acute care services. BioScrip operates with a commitment to
bring customer-focused pharmacy and related healthcare infusion
therapy services into the home or alternate-site setting. By
collaborating with the full spectrum of healthcare professionals
and the patient, BioScrip provides cost-effective care that is
driven by clinical excellence, customer service, and values that
promote positive outcomes and an enhanced quality of life for those
it serves.
ABOUT HOME SOLUTIONS
Home Solutions, headquartered in Hammonton, New Jersey, is a
leading specialty infusion provider servicing approximately 14,000
patients annually throughout the Northeastern and Mid-Atlantic
regions of the U.S. Current projects are underway that will allow
the company to reach additional patients in the New England and
Southeastern regions of the U.S. The Company is committed to
clinical excellence, compassion and professionalism. Home Solutions
is Joint Commission accredited and provides a full range of
infusion and specialty services in the home and alternate setting.
Our commitment is to put the patient first in delivering a quality
service while offering cost effective solutions to various industry
stakeholders such as physicians, hospitals, managed care payors,
and governmental agencies. InfuLink®, the Company’s proprietary web
monitoring tool, shares data with healthcare providers to help
optimize clinical outcomes. More information about Home Solutions
is available at www.infusioncare.com.
Forward-Looking Statements – Safe HarborThis
press release includes statements that may constitute
"forward-looking statements," including projections of certain
measures of the Company's results of operations, including its
revenues and cash flows, projections of future cost savings
associated with the absence or reduction of certain charges and
expenses, and other statements regarding the Company's expectations
regarding the impact of its financial improvement plan and
strategy. These statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
You can identify these statements by the fact that they do not
relate strictly to historical or current facts. In some cases,
forward-looking statements can be identified by words such as
"may," "should," "could," "anticipate," "estimate," "expect,"
"project," "outlook," "aim," "intend," "plan," "believe,"
"predict," "potential," "continue" or comparable terms. Because
such statements inherently involve risks and uncertainties, actual
future results may differ materially from those expressed or
implied by such forward-looking statements. Investors are cautioned
that any such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and that
actual results may differ materially from those in the
forward-looking statements as a result of various factors.
Important factors that could cause or contribute to such
differences include but are not limited to risks associated with:
the Company's ability to integrate the acquisition of Home
Solutions and obtain financing in connection therewith, the
Company's ability to grow its core Infusion revenues, the Company's
ability to continue to experience positive results from its
financial improvement plan to reduce operating costs; reductions in
federal, state and commercial reimbursement for the Company's
products and services; increased government regulation related to
the health care and insurance industries; as well as the risks
described in the Company's periodic filings with the Securities and
Exchange Commission. The Company does not undertake any duty to
update these forward-looking statements after the date hereof, even
though the Company's situation may change in the future. All of the
forward-looking statements herein are qualified by these cautionary
statements.
Additional Information and Where to Find ItIn
connection with the proposed transaction, the Company will prepare
a proxy statement to be filed with the Securities and Exchange
Commission (“SEC”). When completed, a definitive proxy
statement and a form of proxy will be mailed to the stockholders of
the Company. The Company’s security holders are urged
to read the proxy statement carefully when it becomes available, as
well as any other relevant documents filed by the Company with SEC,
because they will contain important information. The
Company’s stockholders will be able to obtain, without charge, a
copy of the proxy statement (when available) and other relevant
documents filed with the SEC from the SEC’s website at
http://www.sec.gov. The Company’s stockholders will also be able to
obtain, without charge, a copy of the proxy statement and other
relevant documents (when available) by directing a request by mail
or telephone to BioScrip, Inc., Attn: Chief Financial Officer, 1600
Broadway, Suite 950, Denver, CO 80202, telephone: (720) 697-5200,
or from the investor relations page on the Company’s website at
http://bioscrip.com/overview.
The Company and its directors and officers may be deemed to be
participants in the solicitation of proxies from the Company’s
stockholders in connection with the proposed transaction.
Information about the Company’s directors and executive officers
and their ownership of the Company’s equity interests is set forth
in the proxy statement for the Company’s 2016 Annual Meeting of
Stockholders, which was filed with the SEC on April 27, 2016.
Stockholders may obtain additional information regarding the
interests of the Company and its directors and executive officers
in the proposed transaction, which may be different than those of
the Company’s stockholders generally, by reading the proxy
statement and other relevant documents regarding the proposed
transaction when filed with the SEC.
For Further Information:
Investor Contact
Jeffrey M. Kreger
BioScrip Chief Financial Officer
(720) 697-5200
jeffrey.kreger@bioscrip.com
Media Contact
Susan J. Lewis
(303) 766-4343 or (303) 518-7100
slewis@pairelations.com
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