Rite Aid, the big pharmacy chain, agreed on Wednesday to acquire a top pharmacy benefit manager, Envision Pharmaceutical Services, for $2 billion in cash and stock .
Envision Pharmaceutical Services, known as EnvisionRx, is owned by the private equity firm TPG, making this one of the year’s early successful exits for a buyout firm.
Rite Aid will pay TPG about $1.8 billion in cash and $200 million in stock for EnvisionRx. The value of the deal also includes an expected future tax benefit of $275 million.
In EnvisionRx, Rite Aid is getting a national pharmacy benefits manager with about $5 billion in projected annual revenue. Rite Aid has more more than 4,500 pharmacies across 31 states and Washington, D.C.
“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,” Rite Aid’s chief executive, John T. Standley, said in a statement. “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.”
Rite Aid has a market value of more than $7 billion. Shares in the company were up more than 4 percent in premarket trading.
“Combining our comprehensive suite of pharmacy benefit management services with Rite Aid’s established retail healthcare platform is a natural fit that is increasingly preferred by plan sponsors,” EnvisionRx’s chief executive, Frank Sheehy, said in the statement. “Together, we see tremendous opportunities to provide new and existing customers with an integrated healthcare offering that will build upon the company’s strong existing platform.”
Mr. Sheehy will continue to run EnvisionRx as a subsidiary of Rite Aid.
Citigroup advised Rite Aid and Skadden, Arps, Slate, Meagher & Flom provided legal advice. JPMorgan advised EnvisionRx, and Cleary Gottlieb Steen & Hamilton provided the seller with legal advice.