Full Press Release Details
BioScrip Chief Financial Officer
BIOSCRIP ANNOUNCES TRANSFORMATIVE ACQUISITION
OF HOME SOLUTIONS THAT WILL ENHANCE FOCUS AS HOME INFUSION LEADER
Combination with Home Solutions Adds Experienced
and Proven Leadership Team
Accretive Transaction Provides Substantial
Operating Synergies and Deleveraging Opportunity
Enhances Focus on Higher Margin Core Infusion
DENVER, CO and HAMMONTON, NJ - June
13, 2016 - BioScrip, Inc. (NASDAQ: BIOS) ("BioScrip" or the "Company"), a leading national provider
of infusion and home care management solutions, today announced that it has entered into an agreement to acquire the business of
HS Infusion Holdings, Inc. ("Home Solutions"), in a highly synergistic, transformational and accretive transaction
with significant benefits for all stakeholders. Based in Hammonton, New Jersey, Home Solutions is a leading provider of home infusion
and home nursing products and services to patients suffering from chronic and acute medical conditions. Home Solutions is a privately
held company whose principal shareholder is KRG Capital Partners LLC.
Under the terms of the transaction, BioScrip
will acquire substantially all of the assets and assume certain liabilities of Home Solutions and its subsidiaries for total transaction
consideration of $85.0 million at closing (the "Closing Consideration") and additional contingent consideration in
the form of restricted stock units ("RSUs") (the "Contingent Consideration").
The Closing Consideration will consist of $80.0
million payable in cash, subject to certain adjustments and $5.0 million in shares of the Company's common stock. The Contingent
Consideration will consist of restricted shares of BioScrip common stock, issued in two tranches with different vesting conditions.
The number of RSUs in Tranche A and Tranche B is approximately 3.1 million and 2.475 million, respectively. The RSUs would vest
in two tranches when BioScrip shares exceed 20-day average trading prices of $4.00 per share and $5.00 per share, respectively,
subject to certain time restrictions and under certain circumstances, in the event of a change of control.
In 2015, BioScrip and Home Solutions generated
revenue of $982 million and $109 million, respectively. On a pro forma basis, the combined company is expected to generate over
$1 billion in revenue. The transaction is expected to be accretive to BioScrip's financial results and is estimated to generate
$14-17 million of synergies approximately 12-18 months following the closing. The operating synergies are primarily related to
supply chain efficiencies, infrastructure optimization and other corporate and organizational improvements.
The additional financial contribution from
Home Solutions, including anticipated synergies, is expected to strengthen the Company's balance sheet and leverage profile,
thereby improving BioScrip's strategic flexibility and competitive positioning and realigning the Company as a growth platform
in the attractive post-acute care segment.
The combination of BioScrip and Home Solutions
brings together two highly complementary core infusion services portfolios that will have greater scale and financial resources.
Home Solutions is one of the largest independent home infusion providers in the country, with branches that span across the East
Coast. For full year 2015, core revenue increased 8.3% and core admits increased 12.0%, both over the prior year period.
The combined company will have an enhanced
national presence, providing expanded core infusion services for patients and benefitting from additional payor relationships.
The addition of Home Solutions will enhance BioScrip's revenue mix and margins, as Home Solutions' revenues from core
infusion therapies represented 81% of total gross revenues at the end of 2015.
Carter Pate, Chairman of BioScrip, said, "This highly compelling
transaction will deliver meaningful benefits to our stakeholders and position the company extraordinarily well for future growth
and strategic opportunities. We are energized by this combination and for the shared benefit of our patient-focused organizations.
I also wish to thank Rick Smith for his leadership and his significant contributions to both BioScrip and the Home Infusion Industry.
I look forward to continuing to work with Rick, Dan and the Board to grow the business and drive value."
Daniel Greenleaf, Chairman and Chief Executive Officer of Home Solutions,
said, "This transaction is a terrific opportunity to combine with a complementary infusion services company that shares our
passion and commitment for providing national reach and local care. Together we will be able to further deliver on our shared mission
of providing cost-effective care that is driven by clinical excellence, customer service, and values that promote positive outcomes
and an enhanced quality of life for patients. I appreciate Rick's partnership and friendship, as well as the support of Carter
and the entire Board as we deliver value to shareholders by building the largest independent home infusion provider."
Upon completion of the transaction, Daniel Greenleaf will become
Chief Executive Officer of BioScrip and join the Company's Board. At that time, Rick Smith, Director and Chief Executive
Officer of BioScrip will become Vice Chairman of the Board of Directors.
Mr. Greenleaf has over two decades of relevant experience in senior
leadership positions in the healthcare industry. Prior to serving as Chairman and CEO of Home Solutions, Mr. Greenleaf served as
President and Chief Executive Officer of Coram Specialty Infusion Services and led Coram to become the industry leader in home
infusion and one of the top-performing healthcare companies in the U.S. with approximately $1.2 billion in revenue, approximately
5,000 employees and nearly 85 locations. While serving as President and Chief Executive Officer of Coram, Mr. Greenleaf assumed
responsibility as Chief Operating Officer of Coram's parent company, Apria Healthcare Group Inc., which had approximately
$2.2 billion in revenue, approximately 13,000 employees and 600 locations. Coram, which was originally purchased by Apria for $350
million, was later sold by Apria's private equity owner, The Blackstone Group, to CVS Caremark (currently, CVS Health Corp)
for $2.1 billion, which underscores the value created for Coram's Home Infusion platform during Mr. Greenleaf's tenure
at Coram. Prior to his roles at Coram and Apria, Mr. Greenleaf served as President and CEO of VioQuest Pharmaceuticals Inc. and
held leadership roles with Celltech Biopharmaceuticals, Nabi Pharmaceuticals and Schering-Plough Corporation.
Jeffrey Kreger, Chief Financial Officer of BioScrip, will serve
as the combined company's Chief Financial Officer and Treasurer.
BioScrip will continue to be headquartered in Denver, Colorado and
plans to maintain branches throughout the United States, and maintain Home Solutions' Hammonton, New Jersey billing and operations
Richard Smith, Chief Executive Officer of BioScrip, said, "We
are excited to bring together our two complementary companies, both of which have tremendously talented teams, and to expand on
the premier quality-of-care we provide to individuals who require home infusion services. We look forward to welcoming Dan and
the Home Solutions team and expect a seamless integration."
Transaction Financing, Timing and Approvals
The transaction is anticipated to be financed through the net proceeds
from an equity offering to be initiated promptly under the Company's existing shelf registration statement, subject to market
conditions. Any excess proceeds from the offering following the acquisition will be primarily used to reduce BioScrip's outstanding
The transaction, which is expected to close in the third quarter
of 2016, is subject to receipt of necessary regulatory approvals, a financing contingency and approval of certain matters by BioScrip
shareholders, as well as customary closing conditions.
Jefferies LLC is acting as financial advisor to BioScrip. Polsinelli
PC, Dechert LLP and Gibson, Dunn & Crutcher LLP are acting as legal advisors to BioScrip. Houlihan Lokey is acting as financial
advisor to Home Solutions and Ropes & Gray LLP is acting as legal advisor.
BioScrip, Inc. is a leading national provider of infusion and home
care management solutions. BioScrip partners with physicians, hospital systems, skilled nursing facilities, healthcare payors,
and pharmaceutical manufacturers to provide patients access to post-acute care services. BioScrip operates with a commitment to
bring customer-focused pharmacy and related healthcare infusion therapy services into the home or alternate-site setting. By collaborating
with the full spectrum of healthcare professionals and the patient, BioScrip provides cost-effective care that is driven by clinical
excellence, customer service, and values that promote positive outcomes and an enhanced quality of life for those it serves.
ABOUT HOME SOLUTIONS
Home Solutions, headquartered in Hammonton, New Jersey, is a leading
specialty infusion provider servicing approximately 14,000 patients annually throughout the Northeastern and Mid-Atlantic regions
of the U.S. Current projects are underway that will allow the company to reach additional patients in the New England and Southeastern
regions of the U.S. The Company is committed to clinical excellence, compassion and professionalism. Home Solutions is Joint Commission
accredited and provides a full range of infusion and specialty services in the home and alternate setting. Our commitment is to
put the patient first in delivering a quality service while offering cost effective solutions to various industry stakeholders
such as physicians, hospitals, managed care payors, and governmental agencies. InfuLink , the Company's proprietary