COVINGTON, Ky., June 3 /PRNewswire/ -- Omnicare, Inc., (NYSE: OCR) today announced that it has acquired substantially all of the assets of Life Care Pharmacy Services, Inc. ("Life Care Pharmacy"), a multi-state provider of institutional pharmacy services owned by Mr. Forrest L. Preston, the founder, chairman and sole shareholder of Life Care Centers of America, Inc. Terms were not disclosed.
Life Care Centers of America, Inc., based in Cleveland, Tennessee, is one of the nation's largest privately owned operators of skilled nursing, assisted living, and retirement facilities with approximately 233 facilities serving more than 31,000 residents in 28 states. Life Care Pharmacy provides comprehensive pharmacy and related consulting services to more than 17,300 residents in long-term care facilities in twelve states from its eight pharmacy locations. Life Care Pharmacy's revenues are currently running at the annualized rate of approximately $45 million. Given the economies of scale and cost synergies anticipated, this acquisition is expected to be accretive to Omnicare's per-share earnings beginning in 1999.
With the acquisition of Life Care Pharmacy, Omnicare now provides institutional pharmacy services to approximately 617,300 residents in approximately 8,600 long-term care facilities in 43 states.
"Life Care Pharmacy is a sizeable and well-regarded institutional pharmacy operation. Its addition to Omnicare significantly expands our core business of providing high quality pharmaceutical care to the nation's elderly and creates economies of scale that allow both Omnicare and Life Care Centers of America to operate more efficiently," said Joel F. Gemunder, Omnicare's president.
"We believe this acquisition gives us the opportunity to bring substantial value to Life Care Centers of America and to all of the other clients of Life Care Pharmacy. Our broad range of sophisticated programs, including our proprietary drug formulary, the Omnicare Geriatric Pharmaceutical Care Guidelines(R), and disease management programs promote the use of the most clinically effective pharmaceutical care at the lowest cost. Programs such as these are increasingly important to all long-term care facilities and particularly so to skilled nursing facilities under the new Prospective Payment System (PPS) for Medicare residents. Also important to long-term care facilities in this environment are our specialized software and data management services that help facilities predict, identify and control the costs of treating our residents. The addition of Life Care Pharmacy's client base also offers new opportunities to leverage our resources in contract research and data management," Gemunder said.
Commenting on the transaction, Forrest L. Preston, chairman of Life Care Centers of America and owner of Life Care Pharmacy, stated, "The decision to sell Life Care Pharmacy is one which I believe will have positive ramifications for all involved. As the nation's largest provider of institutional pharmacy services, Omnicare is well-positioned to achieve economies of scale and to provide clinically advanced services to our Life Care facilities in a more cost-effective manner. Broadening the scope of clinical programs and pharmacy services provided to the residents of Life Care facilities is of keen interest to our organization and the residents we serve. Toward this end, we look forward to building a close, ongoing relationship with Omnicare. Lastly, this transaction will allow us to focus on expanding our core business, providing high quality services to residents of our skilled nursing, assisted living, and retirement facilities."
Concluding, Mr. Gemunder said, "The evolution of the long-term care industry is creating numerous opportunities for alliances that not only serve to contain or lower costs, but also enhance the quality of care for residents. We see great potential in an ongoing relationship with Life Care Centers of America. As we build our respective organizations, we share a common goal of providing quality, cost-effective geriatric care."
Omnicare, based in Covington, Kentucky, is a leading geriatric pharmaceutical care company. Omnicare is the nation's largest provider of professional pharmacy, related consulting and data management services for skilled nursing, assisted living and other institutional health care providers. Omnicare also provides comprehensive clinical research services for the pharmaceutical and biotechnology industries.
Statements in this press release concerning Omnicare's business outlook or position or future economic performance; the potential for expansion; economies of scale; cost synergies; and operating efficiencies; the impact of the Life Care Pharmacy acquisition on earnings, and other expected benefits from the Life Care Pharmacy transaction; together with other statements that are not historical, are forward-looking statements that are estimates reflecting the best judgement of Omnicare based on currently available information. Such forward-looking statements involve known and unknown risks, uncertainties, contingencies and other factors that could cause results, performance or achievements to differ materially from those stated. Such risks, uncertainties, contingencies and other factors, many of which are beyond the control of Omnicare, include overall economic, financial and business conditions; trends for the continued growth of the businesses of Omnicare; the realization of anticipated revenues, profitability and cost synergies; the successful integration of the Life Care Pharmacy acquisition; pricing and other competitive factors in the industry; the effect of new government regulations and/or legislative initiatives, including those relating to reimbursement policies and in the interpretation and application of such policies; the demand for Omnicare's products and services; variations in costs or expenses; the impact of the Year 2000 issues; and other risks and uncertainties described in Omnicare's reports and filings with the Securities and Exchange Commission.
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CONTACT: Cheryl D. Hodges of Omnicare, Inc., 606-392-3331