BioScrip, Inc. (BIOS) CEO Dan Greenleaf on Q4 2018 Results, and BioScrip and Option Care Merger Transaction (Transcript)

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About: BioScrip, Inc. (BIOS)
by: SA Transcripts
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Earning Call Audio

BioScrip, Inc. (NASDAQ:BIOS) Q4 2018 Results and BioScrip, and Option Care Merger Transaction Conference Call March 15, 2019 9:00 AM ET

Company Participants

Kathryn Stalmack - SVP and General Counsel

Dan Greenleaf - President and CEO

Steve Deitsch - SVP, CFO and Treasurer

John Rademacher - CEO, Option Care

Mike Shapiro - CFO, Option Care

Conference Call Participants

David MacDonald - SunTrust

Richard Close - Canaccord

Brooks O'Neil - Lake Street Capital Markets

Mike Petusky - Barrington Research

Kevin Ellich - Craig-Hallum

Operator

Greetings, and welcome to the BioScrip and Option Care Merger Transaction Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to Kathryn Stalmack, Senior Vice President and General Counsel for BioScrip. Please go ahead.

Kathryn Stalmack

Good morning and thank you for joining us today. Earlier this morning, BioScrip jointly announced the definitive merger agreement with Option Care and announced the Company's fourth quarter and full year 2018 financial results. Copies of both press releases along with an investor presentation summarizing highlights of the definitive merger agreement with Option Care can be found in the Investor Relations section of our website at www.bioscrip.com. Within two hours of this call completion, an audio replay will be available in the Investor Relations section of BioScrip's website.

Please note that today's presentation is neither an offering of securities nor solicitation of a proxy vote. The information discussed today is qualified in its entirety by the registration statement and joint proxy statement that BioScrip and Option Care will be filing with the SEC in the future.

Before I get started, I'd like to remind everyone that our comments may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such forward-looking statements are based on current expectations, and there can be no assurance that the results contemplated in these statements will be realized. Please refer to our press releases, our reports filed with the SEC, where you will find factors that could cause actual results to differ materially from these forward-looking statements. These forward-looking statements are based upon information available to BioScrip today, and the Company assumes no obligation to update statements as circumstances change.

During this presentation, we will refer to adjusted EBITDA, a non-GAAP financial measure. Reconciliation to the most comparable GAAP financial measure is contained in our press release issued this morning.

Now, with me here today, President and Chief Executive Officer, Dan Greenleaf of BioScrip who will begin the call with opening remarks about the transaction announced this morning. And then, Steve Deitsch, Senior Vice President, Chief Financial Officer and Treasurer of BioScrip will provide a brief recap of BioScrip's fourth quarter and full year financial results. Then, John Rademacher, Chief Executive Officer of Option Care and Mike Shapiro, Chief Financial Officer of Option Care will provide their remarks on the transaction, and we will leave enough time for Q&A. All four members of the management will be available to answer your questions.

And now, I'd like to turn the call over to Dan Greenleaf. Dan?

Dan Greenleaf

Yes. Hey, thanks, Kathryn, and good morning, everyone, and thank you for joining us.

I want to draw your attention to slide four. Clearly, it is a very exciting day for all of us. We are absolutely thrilled to have entered into a definitive merger agreement with Option Care. This historic transaction will transform each of our respective companies in the entire home infusion industry through the creation of a leading independent provider of home and alternate site infusion services.

Our companies have complementary footprints, and the combination creates a well-diversified organization with national reach including approximately 150 locations in 46 states. It also expands our therapies and preferred partnerships with payers, hospital systems and drug manufacturers, allowing us to better serve our patients. We operate in a highly fragmented market, and this transaction gives the combined company the capability to serve more patients with cost-effective care throughout the U.S.

The highly complementary nature of our respective portfolios will enable the delivery of high-quality, cost-effective solutions to providers across the country and will position us to provide superior outcomes for patients, payers and providers.

I see a great cultural fit between our two organizations, highlighted by our common emphasis on clinical expertise and successful patient outcomes. Together, we will have more than 2,900 skilled clinicians and a footprint that covers 96% of the U.S. population.

By merging the with Option Care, we have the potential to drive significant value for BioScrip's shareholders, through a combined operating model and the realization of clearly identified synergies along with the refinancing of BioScrip's complicated capital structure.

Among the key financial takeaways, the combined company is projected to deliver 2018 pro forma annual revenue of more than $2.6 billion, annual run-rate cost synergies of at least $60 million within two years, pro forma adjusted 2018 EBITDA exceeding $200 million, including synergies, a pro forma debt-to-EBITDA leverage ratio of approximately 6 times, providing greater flexibility for the company to grow. With a simplified capital structure, multiple growth opportunities, and achievable run-rate cost synergies, the combined company should be able to delever while pursuing a balanced capital allocation strategy, which will include market, making the appropriate investments to achieve sustainable growth and shareholder value appreciation.

As one of the largest providers of home and alternate site infusion solutions in the United States, the combined companies will be pure play of scale. We believe it will offer investors a compelling way to participate in the attractive and growing home and alternate site infusion market.

Option Care's CEO, John Rademacher, will become the CEO of the combined companies and Option Care's Chief Financial Officer, Mike Shapiro, will become the CFO of the combined companies. John and Mike are accomplished healthcare professionals with significant healthcare leadership experience. I will be staying with the company as an advisor to combined company's Board of Directors.

John has held various executive level positions at leading public health companies, including Cardinal Health, where he served as President and General Manager for both the ambulatory care division and the nuclear and pharmacy services division; and at Cigna Corporation, where he served as President of CareAllies and Chief Operating Officer for the Cigna Behavioral Health business.

Mike served as a 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 United Healthcare Group. He also had a long-standing career with Baxter International, holding several financial positions across several business and corporate functions. Having to gotten to know John and Mike better over the last several months, I’m highly confident that in working with them together, we will take the combined company to the next level.

In short, this is a great fit. We are joining two strong, high-performing companies with track records of growth and success. From this position of strength, the two companies coming together are positioned to grow at even a greater rate.

I am now pleased to turn the floor over to Steve Deitsch, Chief Financial Officer, who will provide an overview of our fourth quarter and full year 2018 results. Steve?

Steve Deitsch

Thank you, Dan, and good morning, everyone.

I am also very excited about this transformative and historic transaction we announced with Option Care this morning. Before we discuss the transaction further, I will provide a brief overview of BioScrip's fourth quarter and full year 2018 financial results which were released this morning.

Fourth quarter net revenue grew 7.8% on a comparable basis to the fourth quarter of 2017. During the fourth quarter of 2018, the Company recorded a bad debt adjustment of $7.5 million based upon trends and cash collections. The bad debt adjustment reduced net revenue and adjusted EBITDA by $7.5 million. Adjusted EBITDA was $11.6 million or $19.2 million before the bad debt adjustment compared to $17.1 million in the prior year quarter, an approximate 12% increase.

Cash and cash equivalents were $14.5 million at December 31, 2018. Adjusted EBITDA for the full year was $45.1 million or $52.6 million before the bad debt adjustment, compared to $45 million in the prior year, a 16.8% increase. This amount was slightly below the low end of our full year EBITDA guidance due to slower than anticipated revenue growth in December. However, we commenced 2019 on a very strong note with gross revenue growth accelerating to 9% in both January and February, and March gross revenue to date trending at similar levels. The first quarter of 2019 will mark the third consecutive quarter of organic revenue growth achieved by BioScrip. Finally, given the combination announced today with Option Care, the Company will not be providing updated 2019 BioScrip financial guidance.

I'll now turn the call over to John Rademacher, to give you some visibility into the Option Care business. John?

John Rademacher

Good morning, everyone, and thanks for joining us today.

I’m happy to be here with you to tell you more about the incredible opportunity we see through the combination of BioScrip and Option Care. And thank you, Dan and Steve. I’ve enjoyed getting to know both of you, and I look forward to working with you as we move toward closing and integration.

I want to underscore how excited I'm to be bringing together two strong, mission-driven companies to create a leading independent provider of home and alternate site infusion services with national reach, comprehensive therapy offering, continued independent and financial capacity and flexibility to succeed and capitalize on growth opportunities.

Taking a step back, Option Care, formerly Walgreens Infusion Services has been an independent infusion services company since it was separated from Walgreens Boots Alliance in 2015 in a joint investment partnership between Madison Dearborn Partners, a leading private equity firm based in Chicago and Walgreens Boots Alliance, Inc.

Option Care has a nearly 40-year history of shaping the home infusion services industry. And during our time under private ownership we have transformed the company, benefiting from the agility of being an independent company with additional investments and access to the expertise capabilities and resources of Madison Dearborn and a continued collaboration with Walgreens.

We have enhanced capabilities, a network of over 70 pharmacies and over 90 alternate treatment sites across the country, over 750 payer relationships, including contracts with all 10 of the top 10 national payers, and we are a contracted provider of Medicare and Medicaid in all 50 states.

Option Care is built on a culture that connects our clinical expertise and Company's success to patient outcomes. We are proud to have skilled clinicians, highly trained in their field who are focused on providing the best in-patient care and new served over a 131,000 unique patients in 2018.

As I touched on previously, BioScrip and Option Care both offer top therapeutic solutions, but Option Care also brings a number of limited distribution drugs and some of those are exclusive to Option Care. And also, like BioScrip, we are focused on innovation, with the reputation for high-quality and patient-centered care, which brings me to slide six.

As a team, we have worked to drive operational efficiency throughout the business. From improving our industrial strength and infrastructure, industry-leading quality management system and deep partnerships with health systems and referral sources, and this has resulted in recognition for Option Care of consistently improving the delivery of service to patients, payers and manufacturers. We put patient care at the center of everything we do, and that is borne out by our high overall patient satisfaction rate, minimal rate of adverse drug reactions and line infection, and the substantial average cost savings our services provide that enable patients to avoid expensive and inconvenient hospital stays. In fact, Option Care is the only home and alternate site infusion services provider with all four industry accreditations. The satisfaction of our patients is at the center of everything we do, and that will remain the case going forward once Option Care and BioScrip combine.

As this transaction brings together two organizations and thousands of employees dedicated to creating a best-in-class experience for our patients and their families, patients will benefit from the combined company's personalized, compassionate approach to care. And together, we will continue focusing on providing the highest quality care in the home infusion industry.

This transformative transaction also offers a compelling opportunity to invest side-by-side with world-class shareholders who have established track records of driving long-term sustainable value in healthcare. Madison Dearborn is successfully investing in growing healthcare companies for over 30 years. Some of the firm's notable health care investments include Sage Products, Sirona Dental Systems, now Dentsply Sirona, Team Health and VWR International. And we have long benefited from the supportive partnership from Walgreens, first as part of the company and since our independence in 2015, they continue to be a great partner as a major shareholder alongside Madison Dearborn. We expect to continue benefiting from Madison Dearborn and Walgreens deep healthcare relationships, additional resources and sector expertise. They should enhance our ability to explore expanded capabilities and services, and deliver high-quality infusion therapy to more patients across the United States.

Moving to slide eight, I'll now spend time going into greater depth describing the numerous benefits of this strategic combination. Importantly, we believe it provides BioScrip shareholders with the opportunity to participate in upside we see resulting from this combination. This upside will be driven by a number of factors. We have an expanded national geographic presence. And I want to point out that why we will be a leader in the market, it will continue to be a highly fragmented marketplace. Together, we have an independent at sale clinical platform to capitalize on the ongoing shift of healthcare and infusion services to lower cost, safer patient preferred setting of the home or an alternate site.

I also want to empathize that as an independent provider, we will retain the unique ability to deliver high-quality infusion therapy to every commercial and governmental payer. We are not reliant on PBMs. And while we will have Medicare and Medicaid exposure, the combined company will experience minimal penstroke risk. In fact, we estimate that over three quarters of the combined company payers will be commercial payers.

Additionally, we have enhanced payer diversity with the top 10 payers all in network and strengthened and expanded combined product portfolio, plus the capabilities to treat additional growth through new product and service introductions due to an enhanced scale. We also expect the transaction to provide achievable cost synergies including meaningful operating and supply chain efficiencies. And, our enhanced financial profile will further enable the combined company to pursue a balanced capital allocation strategy, including investing in our people and services to drive growth and capitalize on favorable market trends while also prudently managing the combined company’s debt profile. Finally, we are bringing together the best of both businesses, including an experienced leadership team and Board of Directors that will draw from the talent from both Option Care and BioScrip.

If you turn to slide nine, you can see the combined company will be a leading independent provider of home and alternate site infusion services. As Dan mentioned, with more than $2.6 billion in combined 2018 pro forma revenue, our collective national reach will include the largest and most skilled group of more than 2,900 clinicians, including pharmacists, pharmacy technicians, nurses and dieticians patients.

I'll let Dan talk about the combined company's expanded reach.

Dan Greenleaf

Thanks, John.

So, I think, some of you heard me talk about a desire to expand west of the Mississippi River. I think, a number of you on the phone over the years have heard my descriptions of Louisiana Purchase and Oregon Territory, as I like to joke, and I look at this, and this really accomplishes that. And I think it’s one of the things that among the other opportunities we have here I'm most excited about.

And one of the great aspects of this transaction is that it provides us with a truly national platform. Our expanded reach 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. Indeed, our combined employee base will utilize clinical monitoring and reporting to develop personalized care plans for patients and will be able to provide ongoing quality care in support of complex therapy regimens. I can't emphasize enough the value of a best-in-class platform that is of national scope. Due to our scale, we will be positioned as the partner of choice for pharmaceutical manufacturers seeking innovative distribution channels and patient support models to access the market. And in areas we are both present, we intend to leverage our combined expertise to ensure we’re able to raise the bar higher because together we will have the resources to successfully and effectively handle the increased volume.

I'll now walk through the terms of the transaction and how we are creating value for BioScrip shareholders. BioScrip will issue new shares to Option Care's shareholders, which is owned by investment funds affiliated with Madison Dearborn Partners and Walgreens in an all stock transaction. Upon completion of the transaction, the Madison Dearborn funds and Walgreens will beneficially owned approximately 80% of the combined companies on a fully diluted basis with BioScrip shareholders holding the remainder. Our common stock will continue to be listed on the NASDAQ Global Market. An important element of this transaction is the fact that the company will be run by a management team that draws on the best talent from both BioScrip's and Option Care.

As I mentioned earlier, John will serve as the CEO of the combined company and Mike Shapiro will be the CFO, I will remain active as a special advisor to the Board. The combined company’s Board will have 10 members, made-up of 8 directors from Option Care and 2 from BioScrip's Board. BioScrip's current Chairman Carter Pate, will serve as a Director of the combined company, as will Dave Golding from the BioScrip Board. The combined company's Board is expected to benefit from the addition of the industry leaders such as Harry Kraemer, John Arlotta and Nitin Sahney.

We look forward to introducing you to additional members of the combined company's Board and the leadership team as we approach closing, which we expect in the second half of 2019. There is also committed financing in place to refinance and help optimize and simplify the combined Company's capital structure, and the leadership will focus on pursuing a balanced capital allocation strategy that will enable the combined company to invest in its people and services and to drive organic growth, while paying down debt.

Pro forma combined net leverage ratio is expected to be approximately 6 times, which is -- which compares favorably to BioScrip's standalone net leverage of approximately 11 times and inclusive of BioScrip's preferred equity 13 times as of year-end 2018. The transaction has been unanimously approved by the Boards of Directors of both BioScrip and Option Care and is subject to the satisfaction of customary closing conditions, including regulatory approvals and BioScrip shareholder approval.

Looking at slide 11, let me now underscore the substantial value creation potential of this combination that would result in tangible benefits to shareholders. We are creating a leading, independent provider of home and alternate treatment site infusion therapy services. BioScrip's shareholders will have the opportunity to participate in the long-term potential of a diversified business across payers, therapies and geographies in which no existing payer of the combined company will account for more than 11% of the net revenue across a broad therapy portfolio. BioScrip's shareholders will also benefit from substantial synergies, including over $60 million in run-rate cost synergies forecasted within 24 months of the transaction closing. And as you think about capturing deal synergies and accelerating growth, both Madison Dearborn and Walgreens have a successful track record of driving long-term, sustainable value in healthcare.

The transaction provides what we believe is the compelling opportunity to invest alongside the seasoned investors in a company with enhanced scale, a simplified and enhanced capital structure, and a highly experienced management team and Board of Directors.

Furthermore, the combined company's capital structure will result in enhanced cash flow profile and a financial capacity to pay down debt and invest in growth opportunities while enhanced scale will drive opportunity to capture scale efficiencies and create additional vectors of growth through new product and service introductions.

Now, John will walk us through the favorable dynamics of our industry and how that provides great opportunity for the combined companies.

John Rademacher

Thanks, Dan.

Let me give you a sense of the significant growth opportunity in front of us. We are not only operating in a large and growing industry but we have many tailwinds operating in our best favor.

The U.S. infusion industry is approximately $100 billion, and of that, home and alternate site infusion currently accounts for approximately $12 billion. The combined company will be a leader in this highly fragmented industry, which is estimated to grow approximately 5% to 7% per year.

Together, we will be one of the largest providers of home and alternate site infusion solutions, and we are both built upon a commitment to provide value-based care, which is driving home infusion share growth. Value-based care not only improves clinical outcomes and lowers overall costs, but it also delivers better results for payers and providers.

With unparalleled breadth and depth, we will be uniquely positioned to capitalize on growth opportunities. We intend to pursue multiple avenues of growth, including 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. Our ability to grow should be enhanced by the fact that the combined company will continue to be an independent provider, not tied into any single payer.

Turning now to synergies. We expect to generate over $60 million in run-rate cost synergies savings through meaningful operating and supply chain efficiencies, including driving procurement efficiencies, maximizing local coverage while increasing access to care and optimizing administrative functions across the national network. We will be leveraging the significant talent and assets of the combined teams, and I look forward to capitalizing on the many growth opportunities this combination creates. And as we mentioned earlier, we expect the cost synergies to be realized within 24 months of closing.

I will now let Mike Shapiro discuss the transaction’s financial benefits.

Mike Shapiro

Thanks, John. Good morning, everyone.

Turning to slide 14, I'd like to share a few thoughts regarding the pro forma combined enterprise. This transaction creates an organization with combined 2018 pro forma revenues of more than $2.6 billion and combined 2018 pro forma adjusted EBITDA of more than $200 million inclusive of $60 million in run-rate synergies John just outlined. Given the revenue and earnings growth potential, we believe the opportunity to create value for shareholders is significant. And given the broader region synergy cap for opportunity, we would expect earnings growth to outpace above market revenue growth. And as Steve will cover in a minute, we also expect to generate strong cash flow, as a result of the earnings expansion and disciplined working capital management.

So, with that, I'll turn it back over to Steve to expand on the value-creation potential of the combined enterprise.

Steve Deitsch

Thanks, Mike.

Taking a look at slide 15, you can see how the transaction results in the capital structure that enhances the combined company's cash flow profile and financial capacity to pay down debt and invest in the company's near and long-term growth initiatives.

As the chart demonstrates, instead of paying, as BioScrip currently does, nearly 90% of its adjusted EBITDA to pay down debt, the combined company will reduce that to 50%, thus freeing up cash to invest back into the business and fuel growth. All-in-all, we will be able to drive even more growth opportunities for the business, including continuing to invest in enhanced patient experiences, as well as investing in our people, processes, technologies and facilities to achieve growth, uphold the highest quality of services and provide innovative solutions to the healthcare system.

I'll turn it back to Dan for his concluding remarks.

Dan Greenleaf

Thanks, Steve.

Before we open the floor to questions, I’d just like to reiterate my excitement of the value-creation of this potential of this transaction. This transaction marks a power full expansion of our individual product offering and footprints. And together, we will bring deep clinical expertise in a broad therapy portfolio to make a positive difference to even more people's lives. Industry dynamics, as I have stated before, have never been better. This combination creates a leading independent platform to capitalize on the growing demand for home an alternative site infusion services and how we want to deliver care in the future, particularly through our diverse set of life-improving, cost-effective services. I have the upmost confidence that we have the right team in place to first denigrate then capitalize on the opportunities inherent in this combination, particularly when majority owners that will help achieve growth and significant long-term value appreciation.

Personally, I am thrilled about what this combination will do for all stakeholders, including the industry. And while I continue as CEO of BioScrip until the close of the transaction, I am excited to be a special advisor to the Board of the combined company, because I believe in the merits of this transaction and the resulting growth profile. The opportunity that the union of these two leading, high-performing companies brings to our prayers, providers, biopharma, manufacturers, patients, teammates and our value shareholders is tremendous, and greater than we could achieve on our own. Our excitement is obvious. And each of us also would like to thank our teammates and employees for their dedication to providing the highest quality care in the home infusion industry. And I would also like to make a call out to the Board of Directors at BioScrip because I could not have done this without you. We are confident that together we will be able to drive even more growth opportunities for the business and provide our team members with professional development opportunities.

We will now take your questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of David MacDonald with SunTrust. Please proceed with your question.

David MacDonald

Good morning, guys. Congratulations. I guess, the first question I would have is, we are hearing a lot from the payers in terms of the move to its value-based care, site of care redirection et cetera. I was wondering if you could just dig into that a little bit more, conversations you are having with the big national payers, do you see this deal as an accelerant to some of those value-based care conversations? And then, obviously, there's been some changes in terms of the dynamics in terms of independents. Can you also talk about the uniqueness of being scaled independent of player while you are having those conversations?

Dan Greenleaf

Yes. Dave, I'll start this one out but I would also love to hear from John and Mike on this as well. And as it relates value-based care, there is no question that scale, size, scope, breadth matters, and resources. And candidly, Dave, these types of relationships are enhanced by the scale, size, breadth, scope, and our ability to invest. And I believe this allows us to get on the leading edge of those kinds of relationships. And we've done a lot of work, as you know, in this area, Dave, and we believe there is significant opportunities to move that forward. So, I think that’s a really good question, Dave. And I believe this only enhances our ability to address where the market is going.

You had a second too, Dave?

David MacDonald

Yes, just look there has obviously been some major transactions in the space and you are now -- in terms your independence, I think that that's probably a little bit more of a differentiator now on a go forward basis. If you could just speak to that a little bit.

Dan Greenleaf

Yes. And again, I'll let also John and Mike jump in on this too. But, there is no question. I mean, I think, there is real value in having a nimble, high-speed, high-performing, entrepreneurial, innovative, independent company in this space. And I fundamentally believe that we can move faster than our competitors and be more-focused than our competitors. And now that the company has the resources, the company that has the scope, the breadth, it really has a chance to be in a position to absolutely unequivocally transform architect define, design this industry.

So, with that, I'll turn it over to both, John and Mike.

John Rademacher

Yes. Thanks, Dan. Dave, I look at those two questions actually as one in the sense of we are in a really strong position as an independent provider. And as we outlined with now the expanded reach that we have, as well as the enhanced product portfolio, we believe we will be the partner of choice to help drive site of care initiatives that we are feeling today and working with many of the payers in different conversations, and the opportunity for us to continue to leverage that as we move forward. Those conversations are important. And as Dan said, we believe we will be leading that charge with our ability to have conversations with all commercial payers to support that opportunity. It's all about outcomes. And our focus around driving clinical care and a patient centric approach is well-received by the payers and the patients. And that is something that again is the hallmark of us as an organization is focusing around driving high-quality at appropriate cost.

David MacDonald

Okay. Then guys, if I could just sneak one follow-up in there. Look, obviously, the legacy capital structure of BioScrip has been a little bit challenging. I was wondering with more financial flexibility, if you could just run through the top maybe couple of areas where now that you've got a little bit more money to spend upon closing of investment and opportunity that you see, now that you've got again a little bit more financial flexibility.

Dan Greenleaf

I'd like to have John and Mike answer that one, please.

Mike Shapiro

Look, one of the things we’re excited about is the capital structure that we’re putting in place with committed financing at this point. It can be a very patient capital structure and no near-term maturity, very manageable, as Steve clearly outlined around the utilization of run rate EBITDA to service that debt. And as we relentlessly focus on cash flow generation, again this is a growing enterprise, so first and foremost we're going to continue to fund the growth through our people in the technologies and the quality systems that we've established. And frankly beyond that, the near-term priorities are going to be utilizing that capital to implement the synergies and bring these organizations together. But we are excited about -- look, longer-term, it gives us the flexibility to think about how best to deploy it for value-creation, whether it's incremental M&A further down the road, deleveraging or continue to invest in organic growth. So, really excited about the flexibility it offers us.

Operator

Our next question comes from the line of Richard Close with Canaccord. Please proceed with your question.

Richard Close

I guess, this question is for Mike and John. I was wondering, if you could provide us some additional details on Option Care's historical financial performance. I think you got the two-year CAGR in there. Just curious about the margin trends in the business, maybe since you took it private and the transaction back in 2015.

Mike Shapiro

It’s Mike, and I'll start and obviously I'll let John fill in. Look, over the -- as we've outlined on slide four, we've delivered since separation, above market topline growth. And as you all of you know, there have been some reimbursement disruptions in there along the way. So, very proud about the topline performance since separation. And as John alluded to, that also includes the introduction of some new-to-world therapies, which we’ve been able to expand the portfolio across our payer relationships. At the same time, again, after separation, once we stood up the organization as an independent organization, we’ve really started to hit our stride on delivering leveraged growth, which, as we talk about, is driving earnings in excess of the topline expansion. And so, that’s afforded us the opportunity to invest in new facilities and new technologies. And so, since separation, we are really proud of the track record that we’ve put up.

John Rademacher

Yes. And I would add, look, we’ve made significant investment into people, process, technology and our facilities. And that has allowed us to drive operating efficiencies, as Mike said. We've been maniacally focused around making certain that we were growing EBITDA faster than the topline using that leverage and strength that we had for the position in order to move that ahead. So, proud of the track record that we had. We took a pretty sizable punch with the Cures Act as everyone in the industry did. And not only did we withstand that but have grown since then. So, it feels like we are in a really good position and have a fantastic plan for growth.

Richard Close

And my follow-up question, I guess, is on the $60 million plus in synergies. Is there any way you guys can provide areas where you see the savings where that $60 million is essentially coming from?

John Rademacher

Yes. So, we really defined it in three primary areas. We think that there are efficiencies in procurement and supply chain efficiencies that we can operate from that perspective. We believe that there is opportunities in driving just overall execution and operating efficiencies. And the third area that we've identified is really looking at the combination of streamlining the administrative services of both organizations. So, we look at those as probably equal buckets in the way that we’ve defined it as we look forward. And we will be putting in place a very comprehensive integration plan as we move forward so that we can hit the ground running, day one after the close.

Operator

Our next question comes from the line of Brooks O'Neil with Lake Street Capital Markets. Please proceed with your question.

Brooks O'Neil

I'm trying to value the new company. You guys have given us a lot of detail. But, the two pieces that I need to kind of complete my picture are the number of pro forma common shares that will be included at closing and also the cash position of the combined company.

Steve Deitsch

Mike, do you want to take that one?

Mike Shapiro

Yes. You bet, Steve. Yes. S, good morning, Brooks. Look, post close, based on the pro forma ownership, we would expect the post close share count to be approximately $682 million. And as I mentioned, Brooks, we, at this point, have committed financing in place. Naturally, that will simplify -- as Dan mentioned, simplify the capital structure across both enterprises; it’s also going to provide us with adequate liquidity to A, bring these organizations together, and bring these organizations together in a great and drive the organizations on a combined basis. So, we will -- post-combination, we will enter the world as a combined organization with a very strong liquidity profile.

Brooks O'Neil

Did you say a 182 million shares, Mike?

Mike Shapiro

No, 682 million shares.

Brooks O'Neil

682 million shares?

Mike Shapiro

That's correct.

Brooks O'Neil

Okay. And then, my second question, I'm just curious, maybe for Dan, I see on page four, the pro forma EBITDA, you had 45, Option Care 95, but I do the math 32% by BioScrip, 68% Option Care. Help us to understand how you got comfortable with 20% of the combined company going to BioScrip shareholders? Thank you, and good luck going forward.

Dan Greenleaf

Thanks, Brooks. It's really related to the debt and our capital structure, Brooks. That's the delta.

Operator

Our next question comes from the line of Mike Petusky with Barrington Research. Please proceed with your question.

Mike Petusky

So, I guess, I want to understand -- I'm a little surprise that the margins at Option Care, given the scale, the payer mix aren’t a little bit more attractive. But, I'm just wondering is there, I understand Cures and all the rest, but is there a more normalized margin run-rate that you guys feel is attainable over the next few years, or is that sort of mid-single-digits about what you would expect?

Dan Greenleaf

Yes, I'll let John and Mike answer that.

John Rademacher

So, first and foremost, when you look at the breadth of our product portfolio, we have some specialty products that are very high in reimbursement rates but they’re lower margins, based on the size of that -- or the cost of that therapy. And so, that drags down when you look a blended basis, the overall margin on that. As we mentioned previously, we've been spending significant amount of time with our investments to drive operating efficiencies and really make certain that we are focused around reducing the cost of service through those efficiencies and the deployment of that technology. Our expectation is that is going to continue to expand as we move forward, and we can leverage and select the assets across the enterprise, and we will continue to really focus on making certain that we’re driving that overall EBITDA expansion. We've invested tens of millions of dollars into our just overall efficiency model into technology in our facilities. And we really feel good about having an industrial strength infrastructure, and that ability to strike those assets moving forward.

Mike Petusky

And I'm sorry; I may have missed this earlier. But, how are you guys going to handle branding going forward from a clinical perspective? And also just from stock, is this going to continue to trade under BIOS or self side of that plate?

Dan Greenleaf

Mike, this is Dan Greenleaf. But, John, if would like to answer that, please.

John Rademacher

Yes. Thanks, Dan. I guess, as part of the overall integration plan that is something that we will be working with both teams to really understand and define. We know there is substantial brand equity with both organizations. And so, we are going to be thoughtful about what is the decision that we will make and make certain that we have the right branding to represent the value that we bring into the marketplace.

Mike Petusky

And then, just, is it going to continue to trade under BioScrip in terms of…

John Rademacher

Yes. That’s yet to be determined.

Operator

Our next question comes from the line of Kevin Ellich with Craig-Hallum. Please proceed with your question.

Kevin Ellich

I just wanted to start off with synergies. You guys clearly laid out the cost synergies. Could you talk about if there is any revenue synergies from the combined company, especially with the managed care commercial relationships?

Dan Greenleaf

Yes. John and Mike, I'll let you answer that.

Mike Shapiro

It’s Mike Shapiro. So, look, the way that we’ve articulated and outlined the value-creation again in the deck, as John outlined, we’ve identified approximately $60 million of synergies. To be clear, that doesn't include any revenue synergies. And I think, as you picked up on the excitement from the prepared remarks, there is a tremendous amount of excitement around how we provide that national footprint in broader therapy portfolio. So, naturally, we would expect that as this resonates with our payers and health systems, there's an opportunity there. But, specifically, as it relates to how we’ve outlined the value here today, we have not included any specific revenue synergies.

Kevin Ellich

But, would you expect to achieve some by health?

John Rademacher

Yes. This is John. Over the long run, yes, we do. But, we also are trying to be thoughtful because we know there will be disruption as we are looking to bring the organizations together. We’ve tried to be thoughtful and balanced in the way that we are looking at it, and provide you with a sense of where we know there are achievable synergies in that 24-month horizon. So, our focus is around where those thoughts are and making certain that they are achievable and trackable as we are looking at moving this forward.

Kevin Ellich

Okay. And then, John, you actually kind of segued into my next question…

Dan Greenleaf

Hey, Kevin, can I say something too…

Kevin Ellich

Sure, Dan.

Dan Greenleaf

I think, the synergies are -- there is a lot opportunity here. I won't scorn for you, but clearly Kevin, I would not have recommended that we go forward with something like this unless I felt that there were substantive synergies that our shareholders could take advantage of.

Kevin Ellich

Great. I appreciate that color there, Dan. And then, John, you were talking about little disruption. Just wondering, clearly, there is a nice footprint combined nationally. Wondering if you -- what've modeled in, or if you can quantify any potential customer attrition or expected divestitures that you guys might need to get done to complete the transaction?

John Rademacher

Yes. Look, we contemplated within the comprehensive way that we’ve looked at the overall transaction which inclusive in that $60 million is net of both cost to achieve as well as where we see the disruption. We didn't really spike that out as to a separate line item but it’s something that has been factored into the overall net.

Operator

Ladies and gentlemen, we have reached the end of our question-and-answer session. And I'd like to turn the call back to Dan Greenleaf for closing remarks.

Dan Greenleaf

All right. Well, thank you everyone for joining today's call. I also want to thank John and Mike for joining to discuss today's exciting announcement. And I look forward to -- do we have another? That concludes today's conference call and you may disconnect.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.