Diplomat Pharmacy Inc., a newly minted publicly traded independent specialty pharmacy company based in Flint, has signed a final agreement to acquire Cincinnati-based BioRx LLC, a specialty pharmacy and infusion services company, for $210 million in cash and $105 million in Diplomat common stock.
BioRx provides treatments for patients with ultra-orphan and rare, chronic diseases. The transaction is expected to close in March.
“The combined resources of both companies will make us much stronger and unique within the infusion services industry,” said Diplomat CEO Phil Hagerman in a statement. “The specialty pharmacy market has evolved substantially over the last decade and this partnership will help Diplomat be even more prepared to grow and thrive in the years to come.”
Phil Rielly, co-founder of BioRx, said Diplomat (NYSE: DPLO) is a good match for the long-term goals of the 11-year-old company that focuses on chronic disease therapies.
In 2014, BioRx earned $23 million in EBITDA (earnings before interest, taxes, depreciation and amortization) on $227 million in revenue. The transaction is expected to be accretive to Diplomat’s earnings per share in the first full year following the closing of the transaction.
To help finance the deal, Diplomat received additional financing from GE Capital, with which it has a revolving line of credit. Diplomat said it expects to fund the cash component of the purchase price with the financing led by GE Capital along with cash on hand.
Bass, Berry & Sims PLC and Honigman, Miller, Schwartz and Cohn LLP are acting as legal advisers to Diplomat. Choate Hall & Stewart is advising BioRx.
Last year, Diplomat was listed on the New York Stock Exchange as it raised about $173 million from its initial public offering on 13.3 million shares. The offering was priced at $13 per share. Diplomat’s stock price was around $29.85 today.
Over the past several years, Diplomat has been growing through acquisitions.
For example, Diplomat in 2013 acquired American Homecare Federation Inc., an Enfield, Conn.-based specialty pharmacy, for an unspecified price. Earlier, Diplomat acquired MedPro Rx, a specialty pharmacy based in Raleigh, N.C.
With more than 1,000 employees, Diplomat, which competes in a $63 billion annual specialty market, also offers pharmacy benefit management and mail order services, dialysis medication management, wellness programs and patient counseling services.