Combined Company Becomes Fourth Largest Pharmacy Benefits
Manager
LISLE, IL, July 2, 2012 /PRNewswire/ - SXC Health Solutions
Corp. (NASDAQ: SXCI) (TSX: SXC), a leading provider of pharmacy
benefit management (PBM) services and healthcare information
technology (HCIT) solutions to the healthcare benefits management
industry, announces that it has completed its previously disclosed
merger of Catalyst Health Solutions, Inc. with a wholly-owned
subsidiary of SXC. The merger was effective today following
overwhelming approval by SXC and Catalyst stockholders at special
meetings held this morning.
The transaction creates the fourth largest PBM by prescription
volume, with an annual prescription volume of more than 200 million
adjusted PBM scripts. With combined annual revenues of
approximately $13 billion, the
combined company is expected to cover approximately 25 million
members. SXC will update its 2012 guidance to account for the
completion of the Catalyst merger in its second quarter 2012
earnings release.
"The combination of SXC and Catalyst merges two highly
successful, fast-growing enterprises to deliver the resources,
skill and scale to solve the healthcare cost challenge," said
Mark Thierer, Chairman and CEO of
SXC. "The combined company provides the leading alternative
to the traditional approach of other PBMs through its purchasing
power, coupled with a flexible, agile, client-centered delivery
model. Together, we are able to chart a new course to deliver
distinct advantages to all stakeholders."
Financial Considerations
Under the terms of the merger agreement, Catalyst stockholders
will receive $28.00 in cash and
0.6606 of a share of SXC stock for each Catalyst share.
As previously announced, the transaction is expected to be
accretive to SXC's non-GAAP earnings in 2013, which excludes
transaction-related amortization expected to be approximately
$200 million in the first twelve
months after closing. The combined company expects to achieve
approximately $125 million of annual
cost synergies over the next 18 to 24 months through improved scale
and operating leverage.
Board of Directors
SXC also announced today that two new directors, Harry M. Kraemer, Jr. and Steven B. Epstein, will join the SXC board
following the completion of the transaction. Mr. Epstein's
appointment will become effective in August
2012.
In addition, Curtis J. Thorne and
Philip R. Reddon have tendered their
resignations as SXC directors, effective immediately. "Curt Thorne and Phil
Reddon have been integral members of our Board of Directors
as we have grown from a healthcare IT company into a leader in the
PBM industry," said Mr. Mark
Thierer, Chairman and CEO of SXC. "On behalf of the company,
I would like to thank Curt and Phil for their contribution,
strategic counsel and leadership and years of service to SXC."
About SXC
Ranked number one on the 2011 Fortune 100 List of Fastest
Growing Companies, SXC Health Solutions Corp. is a leading
provider of pharmacy benefits management (PBM) services and Health
Care Information Technology (HCIT) solutions to the healthcare
benefits management industry. SXC's product offerings and solutions
combine a wide range of PBM services and software applications,
application service provider (ASP) processing services and
professional services, designed for many of the largest
organizations in the pharmaceutical supply chain, such as health
plans, employers, federal, provincial, and state and local
governments, pharmacy benefit managers and other healthcare
intermediaries. SXC is headquartered in Lisle, Ill., with multiple locations in the
U.S. and Canada. For more
information please visit www.sxc.com.
SXC Forward-Looking Statements
Certain statements included in this communication, including
those that express management's expectations or estimates of SXC's
or the combined company's future performance, constitute "forward-
looking statements" within the meaning of applicable securities
laws. Forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered
reasonable by management at this time, are inherently subject to
significant business, economic and competitive uncertainties and
contingencies. SXC cautions that such forward-looking statements
involve known and unknown risks, uncertainties and other risks that
may cause SXC's actual financial results, performance, or
achievements to be materially different from SXC's estimated future
results, performance or achievements expressed or implied by those
forward-looking statements. Numerous factors could cause actual
results to differ materially from those in the forward-looking
statements, including without limitation, SXC's ability to achieve
increased market acceptance for SXC's product offerings and
penetrate new markets; consolidation in the healthcare industry;
the existence of undetected errors or similar problems in SXC's
software products; SXC's ability to identify and complete
acquisitions, manage SXC's growth and integrate acquisitions,
including the risk that the SXC and Catalyst businesses will not be
integrated successfully; the possibility that the expected
efficiencies and cost savings from the Catalyst merger will not be
realized, or will not be realized within the expected time period;
SXC's ability to compete successfully; potential liability for the
use of incorrect or incomplete data; the length of the sales cycle
for SXC's healthcare software solutions; interruption of SXC's
operations due to outside sources; disruption from the Catalyst
merger making it more difficult to maintain business and
operational relationships; the risk of customer attrition;
maintaining SXC's intellectual property rights and litigation
involving intellectual property rights; SXC's ability to obtain,
use or successfully integrate third-party licensed technology;
compliance with existing laws, regulations and industry initiatives
and future change in laws or regulations in the healthcare
industry; breach of SXC's security by third parties; SXC's
dependence on the expertise of SXC's key personnel; SXC's access to
sufficient capital to fund SXC's future requirements; and potential
write-offs of goodwill or other intangible assets. This list is not
exhaustive of the factors that may affect any of SXC's
forward-looking statements. Other factors that should be considered
are discussed from time to time in SXC's filings with the U.S.
Securities and Exchange Commission (the "SEC"), including the risks
and uncertainties discussed under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in SXC's 2011 Annual Report on Form 10-K and
subsequent Form 10-Qs, which are available at
www.sec.gov. Investors are cautioned not to put undue
reliance on forward- looking statements. All subsequent written and
oral forward-looking statements attributable to SXC or persons
acting on SXC's behalf are expressly qualified in their entirety by
this cautionary statement. SXC disclaims any intent or obligation
to update publicly these forward- looking statements, whether as a
result of new information, future events or otherwise.
Certain of the assumptions made in preparing forward-looking
information and management's expectations include: maintenance of
SXC's existing customers and contracts, SXC's ability to market
SXC's products successfully to anticipated customers, the impact of
increasing competition, the growth of prescription drug utilization
rates at predicted levels, the retention of SXC's key personnel,
SXC's customers continuing to process transactions at historical
levels, that SXC's systems will not be interrupted for any
significant period of time, that SXC's products will perform free
of major errors, SXC's ability to obtain financing on acceptable
terms and that there will be no significant changes in the
regulation of SXC's business.
SOURCE SXC Health Solutions Corp.