AmerisourceBergen to acquire H.D. Smith
AmerisourceBergen will be acquiring H.D. Smith. The Valley Forge, Pa.-based company will be paying $815 million in cash for the company, which is currently the United States’ largest independent wholesaler.
The Springfield, Ill.-based H.D. Smith has been in business since 1954, and currently operates 10 distribution centers across the country, which provide full-line distribution of branded, generic and specialty drugs, the companies said. H.D. Smith’s customers include retail pharmacies, specialty pharmacies, long-term care facilities, hospital systems and independent doctors and clinics.
“The acquisition of H. D. Smith — a best-in-class private distributor with facilities across the country and a diversified customer base – strengthens our core business and expands and enhances our strategic scale in U.S. pharmaceutical distribution,” AmerisourceBergen chairman and CEO Steve Collis said. “This acquisition also builds upon our foundation and meaningfully expands our support for independent community pharmacies.”
AmerisourceBergen group president of pharmaceutical distribution and strategic global sourcing Bob Mauch told Drug Store News that H.D. Smith’s work with community pharmacies meshes well with the services AmerisourceBergen has been providing through its Good Neighbor Pharmacy independent pharmacy network and its pharmacy services administrative organization Elevate Provider Network.
“They are completely aligned with us in terms of their focus on community care, and they have a keen focus on community pharmacy and independent community pharmacy that they’ve had for a long time,” Mauch said. “We’re committed to being differentiated in the marketplace around customer experience so our customers can focus on their patients and their business, … and H.D. Smith shares that very same philosophy. In fact, we expect we'll learn some things from them as well, which we're very excited about.”
AmerisourceBergen noted that H.D. Smith’s subsidiaries — pharmaceutical brand support provider Triplefin and its PSAO Arete Pharmacy Network were not included in the acquisition.
“Our ultimate priority and commitment has been, and continues to be, the needs of our customers and trading partners,” H.D. Smith chairman and CEO Dale Smith said. “We believe AmerisourceBergen will continue the strong foundation set by my father. In joining AmerisourceBergen, we are confident our mission will continue, and remain a point of pride for the H. D. Smith family and its enduring legacy.”
AmerisourceBergen said that acquiring H.D. Smith would slightly increase the company’s earnings per share in fiscal year 2018, noting that it now expects revenue growth of 8% to 11%, adjusted operating income growth to be 4% to 7% and pharmaceutical distribution services operating income growth of 4% to 8%. Beyond the financial impact, Mauch said that the combination of the companies was a way to expand AmerisourceBergen’s efforts to support healthcare within communities through customer service, which include a revamping of its distribution network from both a physical and IT perspective.
“We’re continuing in a direction that's very focused on community providers in general for AmerisourceBergen," Mauch said. “The investments that you see — whether it's the distribution network and IT or GNP and Elevate, I think acquiring H.D. Smith is another step in that direction in terms of us being able to bring some of those services and resources to the independent pharmacy community.”
The company said it expects the deal to close in early 2018.