Amerisource Bergen Expands in the US with Acquisition of H.D. Smith

The large drug wholesaler will pay $815 million in cash for the independent drug distributor.

AmerisourceBergen has announced the acquisition of H. D. Smith, the largest independent wholesaler in the US, for $815 million in cash as a means for driving long-term value.

AmerisourceBergen will issue new long-term debt to raise the funds needed for the purchase. The company does expect the deal to be slightly accretive to its earnings in fiscal year 2018, with full synergies achieved in fiscal year 2020. Overall, AmerisourceBergen expects the acquisition to increase revenue growth to 8-11% and operating income growth for the Pharmaceutical Distribution Services segment to be in the range of 4-7%. The deal is expected to close in early 2018 following regulatory review.

AmerisourceBergen is a large wholesaler/distributor of veterinary and human pharmaceutical products. Headquartered in Valley Forge, Pa., the company has 20,000 employees and is ranked #11 on the Fortune 500, with more than $150 billion in annual revenue. H. D. Smith, based in Springfield, Illinois, is the largest, privately held national wholesaler in the US and has 10 distribution centers across the country. It provides both generic and branded drugs and a variety of services to retail pharmacies, specialty pharmacies, long-term care facilities, institutional / hospital systems and independent physicians 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,” said Chairman, President and CEO Stephen Collis. “This acquisition also builds upon our foundation and meaningfully expands our support for independent community pharmacies. We remain committed to building our business to meet the evolving needs of our customers, driving long-term value for the healthcare system and delivering compelling returns for our shareholders. Importantly, we are united in our responsibility to create healthier futures.”

Commented Dale Smith, Chairman and CEO of H. D. Smith Holding Company: “Our ultimate priority and commitment has been, and continues to be, the needs of our customers and trading partners. 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.”

 

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