Home and Alternate Site Infusion Therapy Providers BioScrip and Option Care to Merge

By: Option Care
March 15, 2019

Creates a Leading Independent Provider of Home and Alternate Site Infusion Services with Deep Clinical Expertise and Broad Therapy Portfolio

Enhanced Scale and Improved Financial Profile Expected to Enable Growth in Attractive and Growing Segment of U.S. Healthcare Market

BioScrip to Issue New Shares to Option Care’s Shareholder, Which Will Own Approximately 80% of Combined Company on Fully Diluted Basis

Combined Company Will Remain Focused on Delivering Favorable Outcomes for Patients, Payors and Providers

DENVER and BANNOCKBURN, Ill., March 15, 2019 —  BioScrip, Inc. (NASDAQ: BIOS) (“BioScrip”) and Option Care Enterprises, Inc. (“Option Care”), the nation’s largest independent providers of home and alternate treatment site infusion therapy services, today announced that they have entered into a definitive merger agreement. The combination is expected to create a leading independent provider with the national reach, comprehensive therapy offering and financial capacity to succeed in the attractive and growing home and alternate site infusion services segment of the $100 billion U.S. infusion market.

Según los términos del acuerdo de fusión, BioScrip emitirá nuevas acciones al accionista de Option Care, que es propiedad de fondos de inversión afiliados a Madison Dearborn Partners, LLC (“MDP”) y Walgreens Boots Alliance, Inc. (NASDAQ: WBA) (“WBA”), en una transacción con todas las acciones. Una vez completada la transacción, los fondos de MDP y WBA tendrán en usufructo aproximadamente el 80 % de la empresa combinada que cotiza en bolsa con un efecto total de reducción en el valor de los títulos, y los accionistas actuales de BioScrip tendrán el resto. Las acciones ordinarias de la empresa combinada continuarán cotizando en el mercado de valores global Nasdaq. La transacción ha sido aprobada por unanimidad por los consejos administrativos de BioScrip y Option Care.

The combined company will be led by Option Care Chief Executive Officer John Rademacher and Option Care Chief Financial Officer Mike Shapiro and will incorporate the best talent, processes and systems from both Option Care and BioScrip. It also will have a leading, independent clinical platform for delivering high-quality infusion therapy to more patients across the United States and providing superior outcomes for patients, payors and providers. BioScrip President and Chief Executive Officer Daniel E. Greenleaf will remain active in the combined company as a special advisor to its Board of Directors.

Daniel E. Greenleaf, President and Chief Executive Officer of BioScrip, commented, “This is a compelling and complementary fit of two leading players in the U.S. infusion market. Together, we will be able to provide a diverse set of life-improving and cost-effective services to more patients across the United States. Our expanded reach and broader array of offerings provide a key competitive advantage at a time when the demand for home and alternate site infusion services continues to grow. The BioScrip Board and I believe our shareholders will have the compelling opportunity to participate alongside Option Care’s experienced and seasoned shareholders in the long-term potential and value creation opportunities of the combined company.”

John Rademacher, Chief Executive Officer at Option Care, said, “This transaction brings together two organizations and thousands of employees dedicated to creating a best in class experience for our patients and their families. Our goal is to constantly improve the delivery of life-saving therapies and comprehensive care management to the patients we have the privilege of serving. At the center of both organizations is deep clinical expertise and a passion to deliver extraordinary care. We believe combining our unique assets and leading product portfolios will create a powerful, independent platform that will enable delivery of high-quality, cost effective solutions to providers across the country and help facilitate the introduction of innovative new therapies to the marketplace. As an independent provider, we will retain the unique ability to deliver high-quality infusion therapy in the patient-preferred and safer setting of the home or an alternate site to every commercial and governmental payor.

“I am honored to lead the combined company and work with BioScrip’s and Option Care’s talented and dedicated employees, who share a strong commitment to delivering exemplary care that makes a positive difference in people’s lives. I look forward to harnessing the strengths of both of our organizations and industry-leading teams to capitalize on the many growth opportunities this combination creates to drive long-term value for all stakeholders.”

Expected Benefits of the Transaction

• Improved, Cost-Effective Patient Care. Utilizing clinical monitoring and reporting, the combined company’s more than 2,900 skilled clinicians (pharmacists, pharmacy technicians, nurses and dieticians) will develop personalized care plans for patients and be able to provide ongoing quality care in support of complex therapy regimens. With a best-in-class platform that is national in scope, the combined company will also be positioned as the partner of choice for pharmaceutical manufacturers seeking innovative distribution channels and patient support models to access the market. Together, BioScrip and Option Care will cover 96% of the U.S. population, with facilities in 46 states and the ability to dispense and serve patients in all 50 states.
• Enhanced Scale and Therapy Offerings. The combined company will merge BioScrip’s and Option Care’s complementary portfolios and provide products that are currently only available to one of the two businesses, such as Option Care’s access to Cuvitru for the treatment of primary immunodeficiency and Nuzyra™ for the treatment of adults with acute bacterial skin and skin structure infections and community-acquired bacterial pneumonia. The combined company’s expanded geographic coverage, continued independence, leading quality offerings and comprehensive clinical expertise will position it to be a preferred partner for payors, providers, biopharma manufacturers and patients. Furthermore, its enhanced scale will enable it to capture scale efficiencies and create additional vectors of growth through new product and service introductions.
• Powerful Growth Engine in Attractive Industry. Home and alternate site infusion, which currently accounts for approximately 12% of the $100 billion total U.S. infusion market, is estimated to grow approximately 5-7% per year due to attractive market dynamics, including the shift to value-based care that improves clinical outcomes and delivers better results for payors and providers as well. The combined company will have the financial capacity and flexibility, scale and clinical offering diversity to drive organic growth in chronic and acute therapies along with generating growth through operational efficiencies, improved performance in revenue cycle management and innovative new therapy introductions. The combination of BioScrip and Option Care will create a diversified business across payors, therapies and geographies in which no existing payor will account for more than 11% of net revenue.
• Beneficios financieros convincentes: Se espera que la transacción impulse eficiencias significativas en las operaciones y la cadena de suministro, lo que generará más de 60 millones de dólares en sinergias netas previstas para alcanzar el pronóstico completo dentro de los 24 meses posteriores al cierre de la transacción. Se espera que estas sinergias pronosticadas y la escala mejorada de la compañía combinada con ingresos proforma de 2018 de más de $2,600 millones permitan un crecimiento de ventas y de beneficios. Además, BioScrip y Option Care han asegurado un compromiso de financiamiento con Bank of America Merrill Lynch, fondos afiliados a Ares Management Corporation y Goldman Sachs Merchant Banking Division para refinanciar y simplificar la estructura de capital de la compañía combinada, que se espera que no tenga vencimientos a corto plazo, sin capital preferente ni convenio de mantenimiento financiero. Se espera que la nueva estructura de capital proporcione a la compañía combinada un índice de apalancamiento neto combinado proforma sustancialmente más bajo, un costo de capital más bajo, una liquidez adicional significativa y un camino para continuar el apalancamiento. La compañía combinada seguirá una estrategia equilibrada de asignación de capital, continuará invirtiendo y mejorando las experiencias de los pacientes, así como a su gente y sus servicios para impulsar el crecimiento orgánico, mientras administra su perfil de deuda y continúa reduciendo el apalancamiento de manera disciplinada.

Shareholders and Management Focused on Driving Value Creation

MDP, a leading private equity firm based in Chicago, has a long and successful history investing in health care companies and partnering with them to achieve growth and significant long-term value appreciation. MDP’s notable health care investments include Ikaria Inc., Sage Products, Sirona Dental Systems, Team Health and VWR International. Option Care, formerly Walgreens Infusion Services, has been an independent company since it was separated from WBA in 2015 in a joint investment partnership between MDP funds and WBA.

Timothy P. Sullivan, a Managing Director and Head of the MDP Health Care team and a Director of Option Care, said, “We believe this transaction provides significant shareholder value creation potential and we are excited to remain a major shareholder alongside Walgreens Boots Alliance in the combined company. John, Mike and the joint leadership team bring operational expertise and strong integration track records. Since separating from Walgreens, we have made significant investments in people, process, technology and facilities. This experience, combined with their commitment to patient-centric care, should drive meaningful and long-term shareholder value.”

Rademacher and Shapiro are seasoned health care professionals with significant operational expertise and public company experience. Rademacher has held various executive-level positions at leading public healthcare companies, including Cardinal Health where he served as President and General Manager for both the Ambulatory Care Division and the Nuclear and Pharmacy Services Divisions, and at Cigna Corporation where he served as President of CareAllies and Chief Operating Officer for the CIGNA Behavioral Health business. Shapiro served as the Senior Vice President and Chief Financial Officer for Catamaran Corporation, a publicly-traded pharmacy benefits manager, and led the successful process through which the company was sold to UnitedHealth Group. He also had a longstanding career with Baxter International, holding several financial positions across several businesses and corporate functions.

Rademacher has spearheaded Option Care’s Zenith 20/20 program, which changed the company’s operating model, implementing technology, operational design and facility upgrades throughout the organization. Under his leadership, Option Care has focused on providing high-quality care and improving delivery of services to patients, payors and manufacturers. The combined company, its employees and all stakeholders are expected to benefit from a leadership team focused on creating a culture that connects its clinical expertise and company success to patient outcomes.

In addition to Rademacher and Shapiro, the combined company’s leadership will draw from the experienced teams of both Option Care and BioScrip.

The transaction, which is expected to be completed in the second half of 2019, is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by BioScrip shareholders.

Conference Call, Webcast and Presentation

BioScrip y Option Care realizarán una conferencia telefónica a las 9:00 a. m., ET, el día de la fecha, 15 de marzo de 2019, para analizar la transacción. Los números de marcación para la llamada son (877) 423-9820 (llamada gratuita en los EE. UU.) O (201) 493-6749 (internacional). Una transmisión en vivo de la conferencia telefónica y los materiales de presentación asociados estarán disponibles en la sección "Inversionistas" del sitio web de BioScrip en:www.bioscrip.com

Una reproducción en línea de la conferencia telefónica estará disponible aproximadamente dos horas después de la finalización de la conferencia telefónica en la sección Relaciones con los inversionistas del sitio web de BioScrip en: www.bioscrip.com.

Advisors

In connection with the transaction, Jefferies LLC and Moelis & Company LLC are acting as joint financial advisors to BioScrip, and Gibson, Dunn & Crutcher LLP is serving as legal advisor. Goldman Sachs & Co. LLC and BofA Merrill Lynch are acting as financial advisors and Kirkland & Ellis LLP is acting as legal advisor to Option Care.

FORWARD LOOKING STATEMENTS
Esta comunicación, además de la información histórica, contiene “declaraciones prospectivas” (como se define en la Ley de Reforma de Litigios sobre Valores Privados de 1995) con respecto, entre otras cosas, a eventos futuros o al desempeño financiero futuro de BioScrip y Option Care. Todas las declaraciones que no sean declaraciones de hechos históricos son declaraciones a futuro. Además, palabras como "anticipar", "creer", "contemplar", "continuar", "podría", "estimar", "esperar", "pretender", "puede", "planificar", "potencial" "predecir", "proyectar", "buscar", "debería", "objetivo", "hará", "haría" o la forma negativa de estas palabras, y las palabras y los términos de sustancia similar utilizados en relación con cualquier discusión sobre planes futuros, acciones o eventos identifican declaraciones prospectivas.

Forward-looking statements relating to the proposed transaction include, but are not limited to: statements about the benefits of the proposed transaction between BioScrip and Option Care, including future financial and operating results; BioScrip’s and Option Cares plans, objectives, expectations and intentions; the expected timing of completion of the proposed transaction; and other statements relating to the acquisition that are not historical facts. Forward-looking statements are based on information currently available to BioScrip and Option Care and involve estimates, expectations and projections.

Investors are cautioned that all such forward-looking statements are subject to risks and uncertainties (both known and unknown), and many factors could cause actual events or results to differ materially from those indicated by such forward-looking statements. With respect to the proposed transaction between BioScrip and Option Care, these factors could include, but are not limited to: the risk that BioScrip or Option Care may be unable to obtain governmental and regulatory approvals required for the transaction, or that required governmental and regulatory approvals may delay the transaction or result in the imposition of conditions that could reduce the anticipated benefits from the proposed transaction or cause the parties to abandon the proposed transaction; the risk that a condition to closing of the transaction may not be satisfied; the length of time necessary to consummate the proposed transaction, which may be longer than anticipated for various reasons; the risk that the businesses will not be integrated successfully; the risk that the cost savings, synergies and growth from the proposed transaction may not be fully realized or may take longer to realize than expected; the diversion of management time on transaction-related issues; the effect of future regulatory or legislative actions on the companies or the industries in which they operate; the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; economic and foreign exchange rate volatility; and the other risks contained in BioScrip’s most recently filed Annual Report on Form 10-K.

Muchos de estos riesgos, incertidumbres y suposiciones exceden la capacidad de control o predicción de BioScrip. Debido a estos riesgos, incertidumbres y suposiciones, no debe depositar una confianza indebida en estas declaraciones prospectivas. Además, las declaraciones prospectivas se refieren solo a la información actualmente disponible para las partes en la fecha en que se realizan, y ni BioScrip ni Option Care asumen ninguna obligación de actualizar públicamente o de revisar las declaraciones prospectivas para reflejar eventos o circunstancias que puedan surgir después de la fecha de esta comunicación. Ningún punto en esta comunicación tiene la intención, o debe interpretarse, como un pronóstico de ganancias o debe interpretarse en el sentido de que las ganancias por acción de BioScrip para el año financiero actual o futuro o las de la compañía combinada, necesariamente coincidirán o excederán el histórico de ganancias publicadas por acción de BioScrip, según corresponda.

Ni BioScrip ni Option Care brindan ninguna garantía (1) de que BioScrip u Option Care alcanzará sus expectativas, o (2) con respecto a cualquier resultado o el momento de este, en cada caso, con respecto a cualquier acción regulatoria, procedimientos administrativos, investigaciones gubernamentales, litigios, cartas de advertencia, decretos de consentimiento, reducciones de costos, estrategias comerciales, ganancias o tendencias de ingresos o resultados financieros futuros. Todas las declaraciones prospectivas escritas y orales posteriores relacionadas con BioScrip, Option Care, la transacción propuesta, la compañía combinada u otros asuntos y factores atribuibles a BioScrip o a Option Care o a cualquier persona que actúe en su nombre están expresamente calificadas en su totalidad por las declaraciones de advertencia anteriores.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

BioScrip, Inc. ("BioScrip" o la "Compañía") presentará a la Comisión de Bolsa y Valores ("SEC") una declaración de poderes en relación con la transacción propuesta. La declaración de poderes contendrá información importante sobre la transacción propuesta y asuntos relacionados. SE RECOMIENDA Y SUGERIMOS A LOS INVERSIONISTAS Y TENEDORES DE VALORES QUE LEAN LA DECLARACIÓN DE PODERES CUANDO ESTÉ DISPONIBLE YA QUE CONTENDRÁ INFORMACIÓN IMPORTANTE.

La declaración de poderes y otros materiales relevantes (cuando estén disponibles) y cualquier otro documento presentado por la Compañía ante la SEC pueden obtenerse sin cargo en el sitio web de la SEC, en www.sec.gov. Además, los tenedores de valores podrán obtener copias gratuitas de la declaración de poderes y otros materiales relevantes de la Compañía comunicándose con Relaciones con Inversionistas por correo a 1600 Broadway, Suite 700, Denver, CO 80202, Attn: Investor Relations, por teléfono al (720) 697-5200, o visitando la página de Relaciones con Inversionistas de la Compañía en su sitio web corporativo en https://investors.bioscrip.com.

PARTICIPANTS IN THE SOLICITATION

Se puede considerar que la Compañía y sus directores y directivos ejecutivos participan en la solicitud de poderes de los accionistas en relación con los asuntos discutidos anteriormente. La información sobre los directores y directivos ejecutivos de la Compañía se establece en la Declaración de poderes en el Anexo 14A para la reunión anual de accionistas de la Compañía de 2018, que se presentó ante la SEC el 4 de abril de 2018. Este documento puede obtenerse gratuitamente de las fuentes indicadas anteriormente.  

La información sobre la propiedad de los directores y directivos ejecutivos de la Compañía en los valores de la Compañía se incluye en las presentaciones de la Compañía ante la SEC en los Formularios 3, 4 y 5, que se pueden encontrar en el sitio web de la SEC en www.sec.gov. Otra información con respecto a los participantes en la solicitud de poderes y una descripción de sus intereses directos e indirectos, por tenencias de valores o de otra manera, estará contenida en la declaración de poderes preliminar y la declaración de poderes definitiva y otros materiales relevantes que se presentarán ante la SEC cuando estén disponibles.

About BioScrip, Inc.

BioScrip, Inc. is one of the largest independent national providers of infusion and home care management solutions, with approximately 2,100 teammates and nearly 70 service locations across the U.S. BioScrip partners with physicians, hospital systems, payors, pharmaceutical manufacturers and skilled nursing facilities 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.

Acerca de Option Care

Option Care Enterprises, Inc. (Option Care) es el proveedor de servicios de infusión en el hogar y en centros alternativos de tratamiento más grande y más confiable del país. Con acreditaciones de organizaciones de calidad de la industria como ACHC, PCAB, ASHP y URAC,* la empresa se apoya en casi 40 años de experiencia en atención clínica para ofrecer una gestión de terapia centrada en el paciente. Los servicios de infusión distintivos de Option Care comprenden la administración clínica de los medicamentos de infusión, el apoyo de enfermeros y la coordinación de la atención. El equipo multidisciplinario de más de 1,800 profesionales clínicos de Option Care, formado por farmacéuticos, enfermeros y nutricionistas, puede proporcionar cobertura de servicios de infusión en el hogar para casi todos los pacientes en los Estados Unidos que necesiten tratamiento para afecciones complejas y crónicas. Obtenga más información en www.OptionCare.com.