Omnicell, Inc. (OMCL) Closes Surgichem Acquisition; Updates FY14 Outlook

Omnicell, Inc. (Nasdaq: OMCL) announced that it has completed the acquisition of Surgichem Limited, a wholly-owned subsidiary of Bupa Care Homes (CFG) plc. Following the recent clearance by various regulatory agencies in the UK, Surgichem will be integrated with Omnicell's existing UK business, MTS Medication Technologies Limited in the coming months. MTS Medication Technologies Limited is the world's leading supplier of medication adherence packaging solutions.

Surgichem, based in Stockport, UK, is a provider of medication adherence packaging solutions to the UK care home and domiciliary care markets. Surgichem supplies its monitored dosage systems to a network of over 3,200 independent pharmacies and UK pharmacy chains.

"As is the case globally, UK healthcare professionals and caregivers are seeking to improve patient outcomes, reduce medication errors and lower costs by effectively managing compliance to prescribed medication regimes," said Randall Lipps, chairman, president and CEO of Omnicell. "This acquisition is a clear opportunity to bring together the experience of two technology leaders with the mission to extend patient health and satisfaction through convenient, effective medication adherence solutions."

According to the World Health Organization, poor adherence to medication leads to increased morbidity and death. Approximately 50% of patients in developed countries do not take their medications as prescribed, and up to two-thirds of all medication-related hospitalizations is the result of non-adherence1. Health care systems and community pharmacies agree that resolving medication non-adherence, an issue that has been estimated to cost up to $290 billion annually2 in the United States and £500 million per year3 in the United Kingdom, is a key to delivering better clinical outcomes and financial results.

"Omnicell is committed to improving medication adherence in the UK. We expect that combining the leading multi- and single-dose packaging technologies of MTS Medication Technologies with the very complementary Surgichem offering will help to solve the issue by speeding the development of new products and services for the UK adherence market, benefiting our pharmacy customers and their patients," added Mr. Lipps. "Omnicell is passionate about our mission to make taking medication as easy and safe as possible for everyone."

Omnicell financial guidance for 2014 is adjusted to include the expected results of Surgichem following the acquisition. Revenue for 2014 was previously expected to be between $415 and $425 million and is now expected to be between $420 and $430 million, an increase of 10 to 13% over 2013. Non-GAAP earnings per share were previously expected to be between $1.17 and $1.23 and are now expected to be $1.18 to $1.24. Omnicell expects initial costs to integrate Surgichem to be incurred during the first 12 months following the acquisition, and following that period, it is expected the acquisition will be accretive by approximately $0.03 per share annually. Omnicell previously expected 2014 product bookings to be between $340 and $350 million and now expects product bookings between $345 and $355 million with the inclusion of Surgichem.

*** The Street sees FY14 revs of $424.6 million and EPS of $1.23.

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