Premier (NASDAQ:PINC) inks an agreement to acquire Innovatix, LLC and Essensa Ventures, LLC for $325M. The company currently owns 50% of Innovatix. An affiliate of the Greater New York Hospital Association, GNYHA Holdings, LLC owns the other 50% and all of Essensa. The transaction will be funded with Premier's existing credit line. GNYHA can earn an additional $43M upon the achievement of certain performance targets in fiscal 2017.
Innovatix is provider of supply chain solutions and a group purchasing organization (GPO) serving more than 32K customers, including senior living facilities, pharmacies and independent medical oncologists.
Essensa is a national GPO that delivers procurement solutions and supply chain efficiencies to classes of trade not served by Innovatix, including ambulatory care, surgery centers, behavioral clinics and clinical laboratories.
In the 12-month period ending June 30, the combined business generated $50M in net income on sales of ~$88M. Over the past three years, compound annual revenue growth has been double-digit.
Premier expects the transaction to be immediately accretive to earnings and revenue. The deal should contribute $53M - 60M to Supply Chain Services revenue, $18M - 21M in incremental non-GAAP segment-adjusted EBITDA and $0.04 - 0.06 to EPS.
Updated fiscal 2017 guidance ($M): Total net revenue: $1,504.0 - 1,575.0 from $1,451.0 - 1,515.0; non-GAAP EPS: $1.80 - 1.93 from $1.76 - 1.87.