Following word that private equity firm KKR (NYSE:KKR) will acquire the company for $29.25 per share in cash (plus the assumption or repayment of debt), shares of PharMerica Corporation (NYSE: PMC) are soaring today, up 15.4% as of 12:05 p.m. EDT.
PharMerica manages pharmacy programs for 15% of the country's nursing homes. Last fall, reports surfaced that PharMerica was open to being acquired.
Today, KKR agreed to buy PharMerica in a deal valued at $1.4 billion including debt. Walgreens Boots Alliance (NASDAQ:WBA) has signed on to be a minority investor in PharMerica once it becomes a private company.
The retail pharmacy giant's decision to join KKR in this deal may not be too surprising given that PharMerica competes head-to-head with CVS Health's Omnicare in the long-term care market. In Q2, PharMerica's revenue was $592 million, up 13.9% year over year, and its EPS was $0.47.
The deal is expected to close early next year, and since investors will receive cash when it happens, there's not a lot of reason to continue owning shares (beyond hoping for a competing bid to emerge). While anything can happen, it's likely that interested parties kicked the tires thoroughly since news broke last fall, and for that reason, another bid appearing might be far-fetched. Instead, PharMerica investors' best bet might be to considering putting their newfound profits to work in other investment options.