Pharmacy company Medco Health Solutions Inc. (MHS) said it will buy closely held drug and device researcher United BioSource Corp. for about $730 million.
Medco, the nation’s biggest pharmacy-benefits manager, said the new business is expected to slightly help its bottom line next year, excluding merger-related items. The deal extends Medco’s data-analytics and research capabilities “to further accelerate pharmaceutical knowledge,” it added.
Medco will fund the deal, which is expected to close this quarter, through its own free cash and existing debt lines. When the deal closes, UBC will be a Medco subsidiary that will be run independently from its core business.
UBC is expected to have full-year revenue of about $280 million, and it has an annual growth rate of more than 20%, Medco said.
Last month, Medco said its second-quarter profit increased 14% as its revenue rose. The company has been reporting continued business growth, boosted by new business and strong demand for cheaper but more-profitable generic drugs.
Shares of Medco closed at $46.92 on Friday and were inactive premarket. The stock has fallen 27% so far this year.
Dow Jones Newswires