RMIWalgreen In Speak To SellSell Its Infusion Services Business
According to a Reuters report mentioning 4 unnamed people, the largest drugstore chain in the United States, Walgreen has actually chosen Bank of America to discover the possible sale of a bulk stake (over 50 %) in its infusion services company, in an offer that might value the division at around $1.5 billion. These sources recommend the recommended sale has actually currently drawn in interest from personal equity companies.
Infusion therapy is the practice of administering specialized drugs to patients intravenously, either by means of injection or catheters, in a variety of settings. Walgreen has actually significantly expanded its Infusion Solutions company with a variety of acquisitions throughout the years. In 2010, the business acquired Omnicare’s home infusion business in exchange for its long-lasting care pharmacy company. In 2012, Walgreen bought Crescent Pharmacy, an infusion pharmacy business, for around $73 million.
Walgreens Infusion Services division provides infusion services at housein the house and at care centers across the US, with a staff of more than 1,600 clinicians. Its infusion therapies are used for medical conditions such as bleeding conditions, cancer treatments and other conditions needing the intravenous injection of pharmaceutical or blood products. The company is currently the biggest United States provider of home-infusion services. Since May 31, Walgreen had 91 infusion and respiratory services facilities.
Infusion services is a growing market, and therefore it is not very clear to us why Walgreen would be willingwant to sell its business. The NHIA estimates the size of the alternate-site infusion market at approximately $9 billion to $11 billion annually, serviced in huge part by even more than 1,500 infusion pharmacy centers. That market is growing at about 15 % a year.In an effort to broaden its presence in the Infusion services space, rival CVS Health obtained Coram LLC, the specialty infusion services and nutrition company system of Apria Health care Group Inc, for about $2.1 billion in January 2014.
In our opinion, the transaction will certainly not have any product effecteffect on Walgreen’s financials and valuation. The Infusion Services business of Walgreen has EBITDA of around $105 million, which accounts for less than 3 % of the business’s total EBITDA.
View our evaluation for Walgreens
Our rate estimate of $64 for Walgreens is somewhat greater than the current market cost.
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