In connection with Premier’s exit from the specialty pharmacy business, the company expects to record anon-cash impairment charge of approximately $87.0 million to $92.0 million related to goodwill, purchased intangibles and other assets of the specialty pharmacy business. Including costs incurred to date, it also expects to incurone-time, transaction and exit-relatedpre-tax charges of approximately $11.0 million to $15.0 million, primarily related to severance and retention benefits and financial advisor and legal fees. These expenses are expected to be recorded in the fiscal fourth quarter ending June 30, 2019.
These actions are expected to increase Premier’s consolidated non-GAAP adjusted EBITDA margin to approximately 45 percent for the full 2019 fiscal year compared to approximately 34 percent for the fiscal 2019six-month period ended December 31, 2018, while reducing annual consolidated net revenue by approximately $470 million and increasing annualpre-tax income by approximately $6 million.
Premier’s specialty pharmacy business currently serves 367 hospitals across 66 health systems. The business consists of Acro Pharmaceutical Services and Commcare Pharmacy, which operate facilities in Philadelphia, Pa. (Acro), Memphis, Tenn. (Acro) and Plantation, Fla. (Commcare).
About Premier Inc.
Premier Inc. (NASDAQ: PINC) is a leading healthcare improvement company, uniting an alliance of more than 4,000 U.S. hospitals and health systems and approximately 165,000 other providers and organizations to transform healthcare. With integrated data and analytics, collaboratives, supply chain solutions, and consulting and other services, Premier enables better care and outcomes at a lower cost. Premier plays a critical role in the rapidly evolving healthcare industry, collaborating with members toco-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide. Headquartered in Charlotte, N.C., Premier is passionate about transforming American healthcare. Please visit Premier’s news and investor sites on www.premierinc.com; as well asTwitter,Facebook,LinkedIn,Instagram andPremier’s blog for more information about the company.
Forward-Looking Statements
Statements made in this release that are not statements of historical or current facts, such as those related to the expected closing date of the transaction, the consideration ultimately received by Premier in the transaction, the anticipated financial and operational success from Premier’s ability to focus on its core, higher-margin supply chain, enterprise analytics and performance improvement capabilities, the timing and accuracy of Premier’s expected and actual impairment charges and exit costs, the expected impact of the transaction on Premier’s consolidated non-GAAP adjusted EBITDA margin, annual consolidated net revenue and annualpre-tax income, above are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Premier to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. Accordingly, readers should not place undue reliance on any forward looking statements.
In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements in the conditional or future tenses or that include terms such as “believes,” “belief,” “expects,” “estimates,” “intends,” “anticipates” or “plans” to be uncertain and forward-looking. The company may not be able to complete the transaction on the terms described above or other acceptable terms or at all because of a number of factors, including without limitation,
