(Reuters) - PharMerica Corp PMC.N, a U.S. pharmacy manager for long-term care facilities, said on Wednesday it agreed to be acquired by a newly formed company controlled by buyout firm KKR & Co LP (KKR.N) for $1.4 billion, including debt.
Under the deal, PharMerica’s shareholders will receive $29.25 per share in cash, representing a 16.8 percent premium to the company’s Tuesday closing price.
PharMerica shares were trading a little short of the offer price at $28.90 before the bell on Wednesday.
Drugstore chain operator Walgreens Boots Alliance Inc (WBA.O) will be a minority investor in the newly formed company. The deal, which will take PharMerica private, is expected to close early next year.
PharMerica was created in 2007 by a merger of businesses spun off from AmerisourceBergen Corp (ABC.N) and Kindred Healthcare Inc KND.N. It provides pharmacy services, ranging from dispensing prescriptions to trying to control drug costs, to nursing homes.
The company also reported second-quarter profit and revenue largely in line with estimates, and said it had canceled its post-earnings conference call in light of the KKR deal.
UBS Investment Bank and BofA Merrill Lynch are serving as financial advisers to PharMerica, while Davis Polk & Wardwell LLP is serving as legal adviser.
Simpson Thacher & Bartlett LLP and Weil, Gotshal & Manges LLP are serving as legal advisers to KKR and Walgreens Boots Alliance, respectively.
Last August, Reuters reported PharMerica was exploring strategic alternatives including a potential sale, citing people familiar with the matter.
Reporting by Natalie Grover in Bengaluru; Editing by Sai Sachin Ravikumar and Supriya Kurane