Bangalore: SXC Health Solutions Corp said it will buy pharmacy benefit manager Catalyst Health Solutions Inc for about $4.4 billion in cash and stock, to expand its presence in the business of paying and processing prescription drug claims.
The pharmacy benefit management (PBM) sector’s importance has grown since the new US healthcare law last year heaped new regulations and heightened focus on reducing costs throughout the healthcare system.
The offer of $81.02 per share represents a premium of about 28% to Catalyst’s Tuesday closing.
Under the terms of the deal, Catalyst shareholders will receive $28 in cash and 0.6606 SXC shares for each Catalyst share held.
The combined company is expected to have $13 billion in revenue and will be headquartered in Lisle, Illinois. It will also maintain a presence in Rockville, Maryland, SXC said in a statement.
The deal is expected to close in the second half of 2012 and add to SXC’s adjusted earnings in 2013.
Transaction-related amortization is expected to be about $200 million in the first 12 months after closing, SXC said.
SXC expects to finance the transaction with $1.7 billion in debt.
J.P. Morgan was the lead financial advisor for SXC, while Goldman Sachs was the lead financial advisor for Catalyst.