| Item 1.01 | Entry into a Material Definitive Agreement. |
On May 6, 2019, Premier, Inc. (the “Company”) announced that its consolidated subsidiaries, Commcare Pharmacy – FTL, LLC, a Florida limited liability company (“Commcare”), Acro Pharmaceutical Services LLC, a Pennsylvania limited liability company (“Acro” and, together with Commcare, the “Sellers”), NS3 Health, LLC, a Florida limited liability company (the “Equity Holder”), and the Company, for limited purposes, entered into an Asset Purchase and Sale Agreement (the “Asset Purchase Agreement”), dated as of May 6, 2019, with ProCare Pharmacy, L.L.C., a Rhode Island limited liability company (the “Buyer”), an affiliate of CVS Health Corporation, pursuant to which Buyer agreed to purchase from the Sellers prescription files and records and certain other assets (collectively, the “Assets”) used in the Company’s specialty pharmacy business (the “Specialty Pharmacy Business”), for a cash purchase price of $22.5 million, plus an amount equal to the value of pharmaceutical inventory up to $20 million, subject to certain adjustments (the “Transaction”).
On June 6, 2019, the Sellers, the Equity Holder, the Company and the Buyer executed the First Amendment to Asset Purchase and Sale Agreement (the “Amendment”). The Amendment revised apre-closing purchase price adjustment mechanism that is reflected in the proceeds set forth below, and made other technical amendments to facilitate the transfer of the Assets and to clarify the original intentions of the parties.
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.01. The Transaction discussed above closed on June 7, 2019. The Company received aggregate proceeds at closing of approximately $22.25 million, and expects to receive approximately $7.6 million on or about June 12, 2019 related to the Buyer’s acquisition of a portion of the Sellers’ pharmaceutical inventory. The Company may receive additional proceeds, to the extent not offset by post-closing obligations of the Sellers, of up to approximately $12.4 million from the Buyer in connection with the acquisition of the Sellers’ remaining pharmaceutical inventory. The proceeds to be received in the Transaction will be used primarily to fund costs associated with the Company’s wind down and exit from the Specialty Pharmacy Business, and for general corporate purposes.
Neither Premier and its affiliates, nor any director or officer of Premier, has any material relationship, other than with respect to the Transaction, with the Buyer or CVS Health Corporation.
The information provided under Item 1.01 and Item 2.01 is a summary of certain portions of the Asset Purchase Agreement and the Amendment and does not purport to be a complete description and is subject to, and qualified in its entirety by, (i) the information provided under Item 1.01 of Premier’s Current Report onForm 8-K filed on May 6, 2019 and (ii) the full text of the Asset Purchase Agreement and the Amendment, which are included as Exhibit 2.1 and Exhibit 2.1.1, respectively, to this Current Report onForm 8-K. To the extent not superseded by thisForm 8-K, Item 1.01 of Premier’s Current Report on Form8-K filed on May 6, 2019 (and no other Item of suchForm 8-K) is incorporated herein by reference herein. Each of Exhibit 2.1 and Exhibit 2.1.1 is intended to provide investors and security holders with information regarding the terms of the Asset Purchase Agreement and the Amendment, respectively, but is not intended to provide any other financial information about the Company or its subsidiaries or affiliates. The representations, warranties, and covenants contained in the Asset Purchase Agreement and the Amendment were made only for purposes of such agreements and as of specific dates, are solely for the benefit of the parties to such agreements, may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties thereto instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors. Investors should not rely on the representations, warranties, or covenants or any description thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, and covenants may change after the date of such agreements, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Items 2.05, 2.06 and 7.01 of Premier’s Current Report on Form8-K filed on May 6, 2019 are not incorporated herein by reference and not a part of this Current Report on Form8-K.
