Diplomat Pharmacy (DPLO) to Acquire BioRx in $315M Deal

Diplomat Pharmacy (NYSE: DPLO) has signed a definitive agreement to acquire BioRx, LLC, a highly specialized pharmacy and infusion services company that provides treatments for patients with ultra-orphan and rare, chronic diseases based in Cincinnati, Ohio. Under the terms of the Agreement, Diplomat will purchase BioRx for $210 million cash, and $105 million in Diplomat common stock upon the closing of the transaction, which is expected to occur in March 2015. The transaction will provide Diplomat with an expected future tax benefit of approximately $50 million. Under the terms of a one year contingent earnout, BioRx can earn an additional $35 million in Diplomat common stock upon achieving an EBITDA-based metric. In 2014, BioRx generated approximately $227 million in revenue and $23 million in EBITDA. The transaction is expected to be accretive to Diplomat's earnings per share in the first full year following the closing of the transaction.

Phil Hagerman, Chairman and CEO of Diplomat commented, "We are very excited to expand Diplomat's infusion services with the acquisition of BioRx. The combined resources of both companies will make us much stronger and unique within the infusion services industry." Mr. Hagerman continued, "The specialty pharmacy market has evolved substantially over the last decade and this partnership will help Diplomat be even more prepared to grow and thrive in the years to come."

"We are proud and excited to join the Diplomat family of companies," said Phil Rielly, co-founder of BioRx. "Diplomat's dedication to patient care is unique in the specialty pharmacy industry and aligns very well with the goals of BioRx."

"Since we started BioRx in 2004, our goal has been to build the country's most patient-centered specialty pharmacy that focuses on chronic and complex therapies. Diplomat shares this focus and represents the right partner, at the right time, for us to continue our mission into the future," said Eric Hill, co-founder of BioRx.

Both BioRx co-founders, Phil Rielly and Eric Hill, have made multi-year commitments to help lead the combined infusion services organization going forward. In addition, all individuals and entities receiving Diplomat common stock as part of this transaction will be subject to certain lock-up restrictions on such shares, for at least six months after closing.

In connection with the pending transaction, Diplomat has obtained committed financing from GE Capital, the agent under Diplomat's existing revolving line of credit. Subject to market conditions, Diplomat expects to fund the cash component of the purchase price with the financing led by GE Capital along with cash on hand.

Bass, Berry & Sims PLC and Honigman, Miller, Schwartz and Cohn LLP are acting as legal advisors to Diplomat. Choate Hall & Stewart are advising BioRx.

Further information regarding the material terms and conditions contained in the definitive stock purchase agreement will be included in Diplomat's Current Report on Form 8-K, which will be filed with the SEC in connection with the transaction.

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