AmerisourceBergen Divests Canadian Pharmaceutical Distribution Business
AmerisourceBergen Corporation today announced that it has signed a definitive agreement to sell its Canadian pharmaceutical distribution business, AmerisourceBergen Canada Corporation (ABCC), to Kohl & Frisch Limited, a Canadian-owned national full-line distributor. The transaction is expected to close in the third quarter of fiscal 2013, and is subject to customary closing conditions, including certain regulatory approvals. AmerisourceBergen will retain its Canadian specialty business.
The estimated sale price is expected to be between $80 million and $100 million, of which approximately half will be financed by AmerisourceBergen. As a result of the agreement, the Company expects to record an estimated loss on sale and other impairment charges of between $160 million and $180 million when it reports its quarterly results for the March quarter of fiscal 2013. This estimated loss on sale, in addition to ABCC’s operating losses, will be reported within discontinued operations. ABCC represented approximately 2 percent of AmerisourceBergen’s total revenues.
Due to the impact of the sale, AmerisourceBergen has revised its financial performance expectations for fiscal year 2013. The Company now expects revenue growth in the range of 8 to 10 percent and it has increased its estimated earnings per share from continuing operations for fiscal 2013 from a range of $2.96 to $3.06 to a range of $3.04 to $3.14. The revised earnings per share range does not include the impact of significant one-time expenses anticipated as a result of the previously disclosed new strategic long-term relationship with Walgreen Co. and Alliance Boots, GmbH, including a LIFO expense due to an anticipated inventory build and recurring non-cash expenses relating to the equity warrants issued in connection with the new relationship. The Company continues to expect free cash flow in the range of $100 million to $200 million, and to repurchase approximately $400 million of common stock in fiscal 2013.