Express Scripts Buys Smaller Rival
LINDA A. JOHNSON
Feb. 07, 2002
TRENTON, N.J. (AP) _ Express Scripts Inc., the nation's third-largest manager of prescription drug plans, plans to buy a smaller privately owned rival, National Prescription Administrators Inc., for $515 million.
The combined company under the deal announced Wednesday will manage prescription benefits for more than 50 million Americans in eight states.
Pharmacy benefit managers approve and process electronic claims for prescriptions at network pharmacies and via mail order.
They also provide information to help network members with chronic diseases better manage their health, and set up formularies of preferred drugs for business, government and union clients that provide prescription benefits to workers and their dependents.
Express Scripts, based in St. Louis, said it expects to complete the deal for East Hanover-based NPA, the largest privately held pharmacy benefit manager in the country, by April 1.
``This is our third major acquisition in the last three or four years,'' said David Myers, senior director of investor relations at Express Scripts.
In 1998, prior to those acquisitions, it handled prescription benefits for about 10 million people, Myers said.
Express Scripts said it will pay for NPA with a combination of cash, bank debt and 552,000 shares of new common stock it plans to issue.
Assuming the deal closes on schedule, it will add about $1.6 billion to revenues, and about 4 cents per share to earnings this year, Express Scripts said.
Express Scripts had $9.3 billion in revenues and net income of $125 million in 2001, according to results reported separately on Wednesday.
The pharmacy benefits industry, led by Advance PCS of Irving, Texas, and Merck-Medco, based in Franklin Lakes, respectively, has consolidated significantly through mergers and acquisitions over the last several years.
NPA, with $2.1 billion in annual revenues, handles pharmacy benefits for several million people in Northeastern states, primarily union and government workers. Express Scripts, which handles drug benefits for 47.5 million people, mainly serves large employers, managed care and other insurers, and third-party insurance administrators.
The combined company now will do so for residents of Arizona, Michigan, Minnesota, Missouri, New Jersey, New Mexico, New York and Pennsylvania.
In trading Wednesday on the Nasdaq Stock Market, Express Scripts fell 25 cents to close at $47.55 a share.
On the Net: http://www.express-scripts.com