VALLEY FORGE, Pa.--(BUSINESS WIRE)--Aug. 25,
2005--AmerisourceBergen Corporation (NYSE:ABC) announced that today it
is commencing a cash tender offer for its $500 million 8.125 percent
senior notes due in 2008 and its $300 million 7.25 percent senior
notes due in 2012, which the Company intends to finance with the
proceeds of a private placement of debt. Further, provided the tender
is completed, the Company's Board of Directors has authorized an
increase to the amount available under its current common stock
repurchase program to a total availability of $750 million.
"Successful refinancing of our current senior notes will increase
our financial flexibility by allowing AmerisourceBergen to obtain
long-term, lower interest rates and improved terms," said R. David
Yost, AmerisourceBergen's Chief Executive Officer. "Repurchasing our
shares reflects AmerisourceBergen's strong cash position."
Michael D. DiCandilo, AmerisourceBergen's Executive Vice President
and Chief Financial Officer said, "With long-term interest rates at
historically low levels, this is an opportune time to refinance these
notes and lower our interest expense for the future.
"Excluding the anticipated refinancing charge of approximately $70
million after-tax related to the tender offer premium and the
write-off of unamortized deferred financing costs, our diluted
earnings per share expectations for fiscal 2005 remain unchanged.
Those expectations are diluted earnings per share from continuing
operations before the cumulative effect of an accounting change of
between $3.30 and $3.50 on a GAAP basis.
"We continue to estimate that diluted earnings per share in fiscal
2006 will be between $3.60 and $4.40, on a GAAP basis. We are
currently in the middle of our extensive annual planning process, and
we expect to update our guidance for fiscal year 2006 in early
November, when we announce results for fiscal year 2005."
The cash tender offer is for any and all $500 million of
AmerisourceBergen's outstanding 8.125 percent senior notes due 2008
(CUSIP No. 03073QAB4) and any and all $300 million of its outstanding
7.25 percent senior notes due 2012 (CUSIP No. 03073EAB1) and includes
a solicitation of consents to eliminate certain restrictive covenants
from the indentures governing the notes. The offer is also conditioned
on, among other things, the execution of financing for the cash tender
price.
The offer and consent solicitation are being made pursuant to an
Offer to Purchase and Consent Solicitation Statement dated August 25,
2005. The total consideration will be determined by pricing both
notes, using standard market practice, to the maturity dates at a
fixed spread of 50 basis points over the bid side yield on the 4.125
percent U.S. Treasury Note due August 15, 2008 for the 8.125 percent
notes and a fixed spread of 50 basis points over the bid side yield on
the 4.00 percent U.S. Treasury Note due November 15, 2012 for the 7.25
percent notes, determined at 2:00 p.m. Eastern Daylight Time on the
business day immediately following the consent date, which the Company
expects to be September 8, 2005, by reference to the Bloomberg
Government Pricing Monitor. Holders who tender and deliver their
consents to the proposed amendments to the indenture governing the
notes by 5:00 p.m. Eastern Daylight Time on September 8, 2005 will be
eligible to receive the total consideration, which includes a consent
payment equal to $30 per $1,000 principal amount of notes tendered.
Holders who tender after the consent date but by 5:00 p.m. Eastern
Daylight Time on September 23, 2005 will be eligible to receive the
tender offer consideration, which equals the total consideration less
the consent payment. The offer and consent solicitation are subject
to, and conditioned upon, the satisfaction or, where applicable,
waiver of certain conditions, as described in the Offer to Purchase
and Consent Solicitation Statement. There can be no assurance that any
of such conditions will be met.
Lehman Brothers Inc. is the Dealer Manager and Solicitation Agent,
and D.F. King & Co., Inc. is the Information Agent, in connection with
the offer and consent solicitation. Requests for information should be
directed to Lehman Brothers Inc. at (212) 528-7581 (call collect) or
(800) 438-3242 (toll free). Requests for documents should be directed
to D.F. King & Co., Inc. at (212) 269-5550 or (800) 859-8508 (toll
free). This news release is not an offer to purchase, a solicitation
of an offer to purchase or a solicitation of consents with respect to
any securities. The offer and consent solicitation are being made
solely by the Offer to Purchase and Consent Solicitation Statement.
Subject to completion of the tender offer and the related debt
financing, the AmerisourceBergen Board of Directors has authorized an
increase in the current stock repurchase program begun in May to a
total availability of $750 million. The Company currently has used $94
million of the initial $450 million authorization and would add $394
million to the program.
AmerisourceBergen will repurchase the shares from time to time for
cash in open market transactions in accordance with applicable federal
securities laws and in accordance with any terms of its debt
instruments. The Company will hold any repurchased shares as treasury
shares, which will be available for general corporate purposes.
About AmerisourceBergen
AmerisourceBergen (NYSE:ABC) is one of the largest pharmaceutical
services companies in the United States. Servicing both pharmaceutical
manufacturers and healthcare providers in the pharmaceutical supply
channel, the Company provides drug distribution and related services
designed to reduce costs and improve patient outcomes.
AmerisourceBergen's service solutions range from pharmacy automation
and pharmaceutical packaging to pharmacy services for skilled nursing
and assisted living facilities, reimbursement and pharmaceutical
consulting services, and physician education. With more than $54
billion in revenue, AmerisourceBergen is headquartered in Valley
Forge, PA, and employs more than 14,000 people. AmerisourceBergen is
ranked #23 on the Fortune 500 list. For more information, go to
www.amerisourcebergen.com.
FORWARD-LOOKING STATEMENTS
This news release may contain certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements
are based on management's current expectations and are subject to
uncertainty and changes in circumstances. Actual results may vary
materially from the expectations contained in the forward-looking
statements. Forward-looking statements may include statements
addressing AmerisourceBergen's future financial and operating results.
The following factors, among others, could cause actual results to
differ materially from those described in any forward-looking
statements: competitive pressures; the loss of one or more key
customer relationships; customer insolvencies; changes in customer
mix; changes in pharmaceutical manufacturers' pricing and distribution
policies or practices; regulatory changes; changes in U.S. government
policies (including changes in government policies pertaining to drug
reimbursement); changes in market interest rates; operational or
control difficulties arising from AmerisourceBergen's outsourcing of
information technology activities; and other economic, business,
competitive, legal, regulatory and/or operational factors affecting
the business of AmerisourceBergen generally.
More detailed information about these and other risk factors is
set forth in AmerisourceBergen's filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for
fiscal 2004.
AmerisourceBergen is under no obligation to (and expressly
disclaims any such obligation to) update or alter any forward looking
statements whether as a result of new information, future events or
otherwise.
CONTACT: AmerisourceBergen Corporation, Valley Forge
Michael N. Kilpatric, 610-727-7118
mkilpatric@amerisourcebergen.com
SOURCE: AmerisourceBergen Corporation