Cencora expanding services with $4.6B Retina acquisition
The deal is expected to add to Cencora's capabilities in Specialty and expand its MSO business.
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Drug distributor Cencora has entered into a definitive agreement to acquire Retina Consultants of America, a management services organization (MSO) of retina specialists, from Webster Equity Partners for $4.6 billion.
Cencora President and CEO Bob Mauch said in a statement that the acquisition will allow the company to broaden its relationships with community providers and place it at the forefront of retinal care.
"We intend to use our leading operational infrastructure to help RCA enhance the provider experience, drive innovative new research and create better outcomes for patients," said Mauch, adding that Cencora will now be able to expand its MSO solutions.
RCA's affiliated practices, physicians and management will retain a minority interest in RCA, with Cencora holding approximately 85% ownership in RCA upon closing. Additionally, Cencora will potentially pay up to $500 million in aggregate contingent consideration in fiscal year 2027 and fiscal year 2028, subject to the successful completion of certain business objectives.
Upon closing, the acquisition of RCA is expected to be approximately $0.35 accretive, net of estimated financing costs, to Cencora's adjusted diluted EPS for its first twelve months. Cencora plans to fund the transaction through a combination of existing cash on hand and new debt financing.
WHAT'S THE IMPACT?
The proposed transaction is expected to add to Cencora's capabilities in Specialty and expand its MSO business, broadening physician and manufacturer relationships as well as Cencora's value proposition to stakeholders.
Cencora expects to use its suite of manufacturer services to enhance RCA's research program and outcomes. RCA operates a clinical research network with 40 clinical trial sites spanning Phases I-IV and 400 full-time research employees.
Cencora's fiscal year 2025 guidance does not currently include the impact of the RCA acquisition, which will be incorporated following the transaction's close.
THE LARGER TREND
Walgreens Boots Alliance sold its remaining shares of Cencora in August for $818 million.
Proceeds will be used primarily for debt paydown and general corporate purposes, as the company continues to build out a more capital-efficient health services strategy rooted in its retail pharmacy footprint, Walgreens said.
ON THE RECORD
"We are pleased to enter our next phase of growth with the support of a leading global pharmaceutical solutions organization," said RCA CEO Dr. Robby Grabow. "With additional resources to support the continued execution of our growth strategy, we will be better positioned to continue expanding our physician network and enhancing the quality of care we provide."
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.
