Pharmacy benefit management (PBM) deals have picked up slightly in 2017. With less than two months left in the year, six of these deals have been announced, up from 2016’s total of three deals.
The most recent announcement is Diplomat Pharmacy Inc.’s (NYSE: DPLO) acquisition of National Pharmaceutical Services for $47 million. Diplomat, a specialty pharmaceutical company, has been active acquiring other specialty pharmacy groups over the past two years. The NPS deal marks its entry into the PBM space.
Pharmaceutical Technologies, Inc., dba National Pharmaceutical Services, is a full-service pharmacy benefit manager that provides proprietary claims-processing system and offers mail-order service under its integrated HMO pharmacy. National Pharmaceutical Services’ transparent pricing model upholds full disclosure of claim accuracy and payments.
The acquisition will increase Diplomat’s ability to develop complete solutions, including cost justification, containment, and health care reporting. The deal is expected to be accretive to adjusted EPS in 2018.
Diplomat will pay $31 million cash and $16 million in Diplomat common stock. The transaction includes real estate valued at around $10 million. National Pharmaceutical is expected to generate revenue of $32 million in 2017, and EBITDA of $5 million. Revenue and EBITDA multiples work out to 1.47x and 9.40x.
The largest PBM deal announced in 2017 was Express Scripts‘ (NASDAQ: ESRX) $250 million takeout of privately held myMatrixx, the Illinois-based pharmacy benefits solution provider specializing in the workers’ compensation industry.
Of course, Express Scripts just announced in October 2017 that it will acquire eviCore healthcare, a medical benefits management company, for $3.9 billion. But that’s in the managed care sector.