Rite Aid, the nation's third-largest drugstore chain, announced Wednesday that it is adding pharmacy benefit manager Envision Pharmaceutical Services to its portfolio for about $2 billion in cash and stock.
The Camp Hill, Pa.-based company, which operates more than 4,500 stores across the U.S., has signed an agreement to purchase EnvisionRx for $1.8 billion in cash and $200 million in Rite Aid stock.
The deal, already approved by both companies' boards, is not expected to close until September. When it does, management expects the newly purchased company to have a positive impact on Rite Aid's following full-year earnings. EnvisionRx's projected 2015 revenue is $5 billion.
Rite Aid most recently reported full-year net income of $249.4 million on $25.5 billion in revenue for the year ended March 1, 2014. The company's next fiscal year results are expected to be filed in April.
Rite Aid follows rival CVS Health in integrating pharmacy benefit management into a drugstore chain. In 2006, CVS Health combined with pharmacy benefit manager Caremark Rx at a cost of about $21 billion in stock.
Pharmacy benefit managers, commonly referred to as PBMs, are responsible for processing and paying prescription drug claims and negotiating with drug manufacturers. EnvisionRx also runs a mail-order and specialty pharmacy program and a Medicare Part D prescription drug plan.
EnvisionRx, which will continue to have its headquarters in Twinsburg, Ohio, is currently owned by private investment firm TPG. TPG bought EnvisionRx in 2013 for an undisclosed amount when the company was recording revenues in excess of $3.5 billion.
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