VALLEY FORGE, Pa.--(BUSINESS WIRE)--May. 17, 2013--
AmerisourceBergen Corporation (NYSE: ABC) today announced that the
parties have received regulatory approval of the previously disclosed
agreement for Walgreen Co. and Alliance Boots GmbH to purchase an equity
stake in the Company. On March 19, 2013, AmerisourceBergen announced
that it had entered into a strategic, long-term relationship with
Walgreens and Alliance Boots, which includes: a ten-year comprehensive
primary pharmaceutical distribution contract with Walgreens; access to
generic drugs and related pharmaceutical products through the Walgreens
Boots Alliance Development joint venture; and opportunities to
accelerate the Company’s efforts to grow its specialty and manufacturer
services businesses domestically and internationally. In furtherance of
this new partnership, Walgreens and Alliance Boots together were granted
rights to purchase an equity position in AmerisourceBergen, which is
outlined in detail below.
AmerisourceBergen continues to expect the new agreements to contribute
an incremental $25 billion in revenues and approximately 20 cents in
earnings per share in fiscal 2014, excluding the amortization of certain
expenses related to the transaction and the warrants issued, certain
non-recurring costs and a potential LIFO charge, and net of certain
start up expenses. In addition, the Company reiterated its expectations
for financial performance for fiscal year 2013, which includes expected
revenue growth in the 11 percent to 13 percent range, and diluted
earnings per share from continuing operations in the lower half of the
range of $3.04 to $3.14, excluding certain expenses related to the
relationship with Walgreens and Alliance Boots and the warrants issued,
and the expected LIFO charge from onboarding of additional branded
inventory. The other assumptions for fiscal 2013 stated in our earnings
release on April 25, 2013 also remain unchanged.
Equity Position
As part of the value creation inherent in these agreements and to align
interests and strengthen the long-term relationship, Walgreens and
Alliance Boots together were granted the right to purchase a minority
equity position in AmerisourceBergen, beginning with the right to
purchase up to 7 percent of the fully diluted equity of
AmerisourceBergen in the open market. In addition, AmerisourceBergen
granted to Walgreens and Alliance Boots equity warrants exercisable for
16 percent in the aggregate of the fully diluted equity of
AmerisourceBergen. The first tranche of warrants, representing 8 percent
of the fully diluted equity of AmerisourceBergen, has a strike price of
$51.50 and will be exercisable for a six-month period beginning in March
2016. The second tranche of warrants, also representing 8 percent of the
fully diluted equity of AmerisourceBergen, has a strike price of $52.50
and will be exercisable for a six-month period beginning in March 2017.
The warrants were allocated equally among Walgreens and Alliance Boots.
Walgreens and Alliance Boots have agreed to customary transfer
restrictions on their equity stake, and have also agreed not to acquire
additional equity of AmerisourceBergen under the terms of a standstill
agreement, subject to the terms and conditions of such agreement,
including certain pre-emption rights and permitted exceptions.
Walgreens will have the ability to appoint one director to
AmerisourceBergen’s board upon Walgreens and Alliance Boots together
acquiring a 5 percent equity stake, and a second director upon exercise
in full of the first warrants.
About AmerisourceBergen
AmerisourceBergen is one of the world's largest pharmaceutical services
companies serving the United States, Canada and selected global markets.
Servicing both healthcare providers and pharmaceutical manufacturers 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 niche
premium logistics and pharmaceutical packaging to reimbursement and
pharmaceutical consulting services. With over $80 billion in annualized
revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and
employs approximately 13,000 people. AmerisourceBergen is ranked #32 on
the Fortune 500 list. For more information, go to www.amerisourcebergen.com.
Cautionary Note Regarding Forward-Looking
Statements
Certain of the statements contained in this press release are
"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. Words such as “expect,” “likely,” “outlook,” “forecast,” “would,”
“could,” “should,” “can,” “will,” “project,” “intend,” “plan,”
“continue,” “sustain,” “synergy,” “on track,” “believe,” “seek,”
“estimate,” “anticipate,” “may,” ”possible,” “assume,” variations of
such words, and similar expressions are intended to identify such
forward-looking statements. These statements are based on management's
current expectations and are subject to uncertainty and change in
circumstances. These statements are not guarantees of future performance
and are based on assumptions that could prove incorrect or could cause
actual results to vary materially from those indicated. Among the
factors that could cause actual results to differ materially from those
projected, anticipated or implied are the following: changes in
pharmaceutical market growth rates; the loss of one or more key customer
or supplier relationships; changes in customer mix; customer
delinquencies, defaults or insolvencies; supplier defaults or
insolvencies; changes in pharmaceutical manufacturers' pricing and
distribution policies or practices; adverse resolution of any contract
or other dispute with customers or suppliers; federal and state
government enforcement initiatives to detect and prevent suspicious
orders of controlled substances and the diversion of controlled
substances; qui tam litigation for alleged violations of fraud
and abuse laws and regulations and/or any other laws and regulations
governing the marketing, sale, purchase, and/or dispensing of
pharmaceutical products or services and any related litigation,
including shareholder derivative lawsuits; changes in federal and state
legislation or regulatory action affecting pharmaceutical product
pricing or reimbursement policies, including under Medicaid and
Medicare; changes in regulatory or clinical medical guidelines and/or
labeling for the pharmaceutical products we distribute, including
certain anemia products; price inflation in branded pharmaceuticals and
price deflation in generics; greater or less than anticipated benefit
from launches of the generic versions of previously patented
pharmaceutical products; significant breakdown or interruption of our
information technology systems; our inability to realize the anticipated
benefits of the implementation of an enterprise resource planning (ERP)
system; interest rate and foreign currency exchange rate fluctuations;
risks associated with international business operations, including
non-compliance with the U.S. Foreign Corrupt Practices Act, anti-bribery
laws and economic sanctions and import laws and regulations; economic,
business, competitive and/or regulatory developments outside of the
United States; risks associated with the strategic, long-term
relationship among Walgreen Co., Alliance Boots GmbH, and
AmerisourceBergen, the occurrence of any event, change or other
circumstance that could give rise to the termination, cross-termination
or modification of any of the transaction documents among the parties
(including, among others, the distribution agreement or the generics
agreement), an impact on our earnings per share resulting from the
issuance of the Warrants, an inability to realize anticipated benefits
(including benefits resulting from participation in the Walgreens Boots
Alliance Development GmbH joint venture), the disruption of
AmerisourceBergen’s cash flow and ability to return value to its
stockholders in accordance with its past practices, disruption of or
changes in vendor, payer and customer relationships and terms, and the
reduction of AmerisourceBergen’s operational, strategic or financial
flexibility; the acquisition of businesses that do not perform as we
expect or that are difficult for us to integrate or control; our
inability to successfully complete any other transaction that we may
wish to pursue from time to time; changes in tax laws or legislative
initiatives that could adversely affect our tax positions and/or our tax
liabilities or adverse resolution of challenges to our tax positions;
increased costs of maintaining, or reductions in our ability to
maintain, adequate liquidity and financing sources; volatility and
deterioration of the capital and credit markets; and other economic,
business, competitive, legal, tax, regulatory and/or operational factors
affecting our business generally. Certain additional factors that
management believes could cause actual outcomes and results to differ
materially from those described in forward-looking statements are set
forth (i) in Item 1A (Risk Factors) in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 2012 and elsewhere in
that report and (ii) in other reports filed by the Company pursuant to
the Securities Exchange Act of 1934. You are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
of the date they are made. Except to the extent required by law,
AmerisourceBergen does not undertake, and expressly disclaims, any duty
or obligation to publicly update any forward-looking statement after the
date of this report, whether as a result of new information, future
events, changes in assumptions or otherwise.
Source: AmerisourceBergen Corporation
AmerisourceBergen Corporation
Barbara Brungess,
610-727-7199
bbrungess@amerisourcebergen.com