Message #24 From:
NewsBot Date: January 22, 2007 01:30:00 PM
ABC News AmerisourceBergen and Kindred Healthcare Name Gregory S. Weishar as CEO of their Combined Institutional Pharmacy Businesses
VALLEY FORGE, Pa. & LOUISVILLE, Ky.--(BUSINESS WIRE)--AmerisourceBergen Corporation (NYSE:ABC) and Kindred Healthcare, Inc.
(NYSE:KND) today announced that Gregory “Greg”
S. Weishar, currently Chief Executive Officer and President of
PharmaCare Management Services, Inc., a subsidiary of CVS Corporation
(NYSE:CVS), has agreed to become Chief Executive Officer of a new
company to be formed by the proposed combination of their respective
institutional pharmacy businesses, PharMerica Long-Term Care (“PharMerica
LTC”) and Kindred Pharmacy Services (“KPS”),
into a new, independent, publicly traded company.
AmerisourceBergen and Kindred also announced the new company will be
named “PharMerica Corporation,”
and the new company’s headquarters will be in
Louisville, Kentucky, with a major customer support center in Tampa,
Florida. In addition, the two companies have each received a private
letter ruling from the Internal Revenue Service affirming the tax-free
nature of each company’s spin off of its
institutional pharmacy business as well as the tax-free status of the
subsequent combination creating the new company.
CEO Named
“We are extremely fortunate to have an
executive with Greg’s experience and
knowledge to lead the new company,” said R.
David Yost, AmerisourceBergen Chief Executive Officer. “He
understands the pharmacy business and how to build a successful
organization.”
“Greg brings the right skills needed to lead
the new company,” said Paul J. Diaz, Kindred
President and Chief Executive Officer. “He
has a strong customer service and pharmacy operations background that
will be essential to the new company.”
“I am excited to have the opportunity to lead
the new PharMerica,” Mr. Weishar said. “We
will leverage the strengths of both companies to build an industry
leading organization with meaningful growth prospects.”
Mr. Weishar is currently Chief Executive Officer and President of
PharmaCare Management Services, a pharmacy benefit management, mail
order and specialty pharmacy services subsidiary of CVS Corporation. He
founded PharmaCare in 1994 and through his leadership PharmaCare has
grown into the fourth largest operation in its industry with revenues in
excess of $3 billion.
New Company to be Named PharMerica Corporation
AmerisourceBergen and Kindred also announced that the name of the new
company will be PharMerica Corporation. The new company will be the
second largest in the institutional pharmacy services market with
revenues of approximately $1.9 billion and a customer base of
approximately 330,000 licensed beds in 41 states. The new name was
selected because it clearly identifies the services to be provided and
market capabilities of the new company and is well recognized in the
marketplace.
Location
In addition, the companies announced that the new PharMerica Corporation’s
headquarters will be in Louisville, Kentucky, with a major customer
support center in Tampa, Florida. The Louisville headquarters, which is
expected to employ as many as 250 to 350 people, was selected because
the new PharMerica received an $8 million incentive package from the
State of Kentucky. In addition, Kindred, which is also headquartered in
Louisville, will be providing information technology and administrative
support to the new company.
“We want to thank officials from the state of
Kentucky and the city of Louisville for putting together an aggressive
incentive package. We think Louisville is an optimal site for the new
company and are excited about creating new growth and employment
opportunities for the city,” Mr. Diaz said.
The site for the headquarters in Louisville has not been determined.
Summary of Proposed Transaction:
The combination is structured to be a tax-free transaction which will
result in AmerisourceBergen and Kindred shareholders each holding 50
percent of the shares of the new company.
In connection with the transaction, PharMerica LTC and KPS will each
make a one-time cash distribution, intended to be tax-free, of up to
$150 million to their respective parent companies, subject to
potential adjustments at the closing of the proposed transaction.
PharMerica LTC and KPS will fund the distributions by borrowing up to
$150 million each for a total of $300 million of new debt. The new
company will assume this debt as part of the proposed merger. This new
debt would be the only long-term debt the new company assumes from the
parent companies, leaving it with significant financial flexibility.
After the cash distributions, each of the institutional pharmacy
businesses would be separately spun off to AmerisourceBergen and
Kindred shareholders, to be followed immediately by a stock-for-stock
merger which would result in AmerisourceBergen and Kindred
shareholders each owning 50 percent of the new company.
AmerisourceBergen currently provides pharmaceutical distribution to
both KPS and PharMerica LTC and under the definitive agreement will
continue to provide those services to the new company. Kindred will
provide information systems support and some administrative support
services to the new company for a period of time.
The transaction creating the new company is expected to be completed
by the end of March 2007.
In order to be completed, the proposed transaction still requires filing
and clearance of a registration statement with the new company by the
Securities and Exchange Commission. The proposed transaction also is
subject to the satisfaction of several closing conditions, including
obtaining financing for the new company. There can be no assurance that
all conditions to completion of the transaction will be met.
About AmerisourceBergen
AmerisourceBergen (NYSE:ABC) is one of the world’s
largest pharmaceutical services companies serving the United States,
Canada and selected global markets. Servicing both pharmaceutical
manufacturers and healthcare providers in the pharmaceutical supply
channel, the Company provides drug distribution and related services
designed to reduce costs and improve patient outcomes. AmerisourceBergen’s
service solutions range from pharmacy automation and pharmaceutical
packaging to pharmacy services for skilled nursing and assisted living
facilities, reimbursement and pharmaceutical consulting services, and
physician education. With more than $61 billion in annual revenue,
AmerisourceBergen is headquartered in Valley Forge, PA, and employs more
than 13,000 people. AmerisourceBergen is ranked #27 on the Fortune 500
list. For more information, go to www.amerisourcebergen.com.
About Kindred Healthcare
Kindred Healthcare, Inc. (NYSE:KND) is a Fortune 500 healthcare services
company, based in Louisville, Kentucky, with annualized revenues of $4.3
billion that provides services in over 500 locations in 39 states.
Kindred through its subsidiaries operates long-term acute care
hospitals, skilled nursing centers, institutional pharmacies and a
contract rehabilitation services business, Peoplefirst
Rehabilitation Services, across the United States. Kindred's 55,000
employees are committed to providing high quality patient care and
outstanding customer service to become the most trusted and respected
provider of healthcare services in every community we serve. For more
information, go to www.kindredhealthcare.com
AmerisourceBergen Forward-Looking
Statements
This news release may contain certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements are
based on management’s current expectations
and are subject to uncertainty and changes in circumstances. Actual
results may vary materially from the expectations contained in the
forward-looking statements. The following factors, among others, could
cause actual results to differ materially from those described in any
forward-looking statements: competitive pressures; the loss of one or
more key customer or supplier relationships; customer defaults or
insolvencies; changes in customer mix; supplier defaults or
insolvencies; changes in pharmaceutical manufacturers' pricing and
distribution policies or practices; adverse resolution of any contract
or other disputes with customers (including departments and agencies of
the U.S. Government) or suppliers; regulatory changes (including
increased government regulation of the pharmaceutical supply channel);
changes in U.S. government policies (including reimbursement changes
arising from federal legislation, including the Medicare Modernization
Act and the Deficit Reduction Act of 2005); price inflation in branded
pharmaceuticals and price deflation in generics; declines in the amounts
of market share rebates offered by pharmaceutical manufacturers to the
PharMerica Long-Term Care business, declines in the amounts of rebates
that the PharMerica Long-Term Care business can retain, and/or the
inability of the business to offset the rebate reductions that have
already occurred or any rebate reductions that may occur in the future;
any disruption to or other adverse effects upon the PharMerica Long-Term
Care business caused by the announcement of the Company’s
agreement to combine the PharMerica Long-Term Care business with the
institutional pharmacy business of Kindred Healthcare, Inc. into a new
public company that will be owned 50% by the Company’s
shareholders (the “PharMerica LTC Transaction”);
the inability of the Company to successfully complete the PharMerica LTC
Transaction; fluctuations in market interest rates; operational or
control issues arising from the Company’s
outsourcing of information technology activities; success of
integration, restructuring or systems initiatives; fluctuations in the
U.S. dollar - Canadian dollar exchange rate and other foreign exchange
rates; economic, business, competitive and/or regulatory developments in
Canada, the United Kingdom and elsewhere outside of the United States;
acquisition of businesses that do not perform as we expect or that are
difficult for us to integrate or control; changes in tax legislation or
adverse resolution of challenges to our tax positions; and other
economic, business, competitive, legal, tax, regulatory and/or
operational factors affecting the business of the Company generally.
Certain additional factors that management believes could cause actual
outcomes and results to differ materially from those described in
forward-looking statements are set forth (i) in Item 1A (Risk Factors)
in the Company’s Annual Report on Form 10-K
for the fiscal year ended September 30, 2006 and elsewhere in that
report and (ii) in other reports filed by the Company pursuant to the
Securities Exchange Act of 1934.
Kindred Healthcare Forward-Looking
Statements
This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. All statements regarding Kindred’s
expected future financial position, results of operations, cash flows,
financing plans, business strategy, budgets, capital expenditures,
competitive positions, growth opportunities, plans and objectives of
management and statements containing the words such as “anticipate,”“approximate,”“believe,”“plan,”“estimate,”“expect,”“project,”“could,”“should,”“will,”“intend,”“may” and other
similar expressions, are forward-looking statements. Statements in this
press release concerning the new company’s
business outlook or future economic performance, anticipated
profitability, revenues, expenses or other financial items, anticipated
cost synergies, economies of scale and product or service line growth,
together with other statements that are not historical facts, are
forward-looking statements reflecting the best judgment of Kindred based
upon currently available information.
Such forward-looking statements are inherently uncertain, and
stockholders and other potential investors must recognize that actual
results may differ materially from Kindred’s
expectations as a result of a variety of factors, including, without
limitation, those discussed below. Such forward-looking statements are
based upon management’s current expectations
and include known and unknown risks, uncertainties and other factors,
many of which Kindred is unable to predict or control, that may cause
Kindred’s actual results or performance to
differ materially from any future results or performance expressed or
implied by such forward-looking statements. These statements involve
risks, uncertainties and other factors discussed below and detailed from
time to time in Kindred’s filings with the
Securities and Exchange Commission.
In addition to the factors set forth above, other factors that may
affect Kindred’s plans or results include,
without limitation, (a) Kindred’s and
AmerisourceBergen’s ability to complete the
proposed merger of their respective institutional pharmacy operations,
including the receipt of required regulatory approvals and the
satisfaction of other closing conditions to the proposed transaction;
(b) Kindred’s ability to operate pursuant to
the terms of its debt obligations and its master leases with Ventas,
Inc. (NYSE:VTR); (c) Kindred’s ability to
meet its rental and debt service obligations; (d) adverse developments
with respect to Kindred’s results of
operations or liquidity; (e) Kindred’s
ability to attract and retain key executives and other healthcare
personnel; (f) increased operating costs due to shortages in qualified
nurses, therapists and other healthcare personnel; (g) the effects of
healthcare reform and government regulations, interpretation of
regulations and changes in the nature and enforcement of regulations
governing the healthcare industry; (h) changes in the reimbursement
rates or methods of payment from third party payors, including the
Medicare and Medicaid programs, changes arising from and related to the
Medicare prospective payment system for long-term acute care hospitals,
including the final Medicare payment rules issued in May 2006, the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003,
and changes in Medicare and Medicaid reimbursements for Kindred's
nursing centers; (i) national and regional economic conditions,
including their effect on the availability and cost of labor, materials
and other services; (j) Kindred’s ability to
control costs, particularly labor and employee benefit costs; (k) Kindred’s
ability to successfully pursue its development activities and
successfully integrate new operations, including the realization of
anticipated revenues, economies of scale, cost savings and productivity
gains associated with such operations; (l) the increase in the costs of
defending and insuring against alleged professional liability claims and
Kindred’s ability to predict the estimated
costs related to such claims; (m) Kindred’s
ability to successfully reduce (by divestiture of operations or
otherwise) its exposure to professional liability claims; (n) Kindred’s
ability to successfully dispose of unprofitable facilities; and (o)
Kindred’s ability to ensure and maintain an
effective system of internal controls over financial reporting. Many of
these factors are beyond Kindred’s control.
Kindred cautions investors that any forward-looking statements made by
Kindred are not guarantees of future performance. Kindred disclaims any
obligation to update any such factors or to announce publicly the
results of any revisions to any of the forward-looking statements to
reflect future events or developments.
