Drugstore chain Rite Aid (NYSE:RAD) announced an agreement to purchase EnvisionRx for $2 billion.
The retailer will pay $1.8 billion in cash and $200 million in Rite Aid stock to gain control of the full-service pharmacy benefit management company. EnvisionRx provides both transparent and traditional pharmacy benefit management through iEnvisionRx and MedTrak, as well as pharmacy related services such as mail-order and the largest cash-pay infertility discount drug program.
"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," said Rite Aid chairman and CEO John Standley. "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. We also look forward to welcoming EnvisionRx's proven management team and talented associates to Rite Aid."
The deal is expected to close by September of 2015 and is subject to regulatory approvals. Following the closing, EnvisionRx will operate a wholly-owned subsidiary of Rite Aid, with its headquarters remaining in Twinsburg, Ohio.
EnvisionRx has a projected revenue of $5 billion in 2015.
The deal is similar to the merger of CVS (NYSE:CVS) and Caremark in 2006, reported Forbes. CVS at the time paid $26.5 billion to acquire Caremark, then the nation's leading pharmacy benefits manager.
Last spring, Rite Aid announced the acquisition of RediClinic, a retail clinic operator, as part of its overall strategy to offer more healthcare products and services.
And after the announcement of the country's Affordable Care Act, Rite Aid was one of several retailers, along with CVS, Walgreens (NASDAQ:WAG) and Kroger (NYSE:KR), that stepped up to help ease the transition for newly insured consumers still waiting for their health plan identification numbers.
-See this Rite Aid press release
-See this Forbes article
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