Daily News: November 16, 2017

JPMorgan, Capital One Support Diplomat LDI Integrated Pharmacy Buy

Diplomat Pharmacy agreed to acquire Leehar Distributors, doing business as LDI Integrated Pharmacy Services, from management and investment firms Nautic Partners and Oak HC/FT Partners. The transaction is expected to close in 30 to 60 days.

LDI Integrated Pharmacy Services is a full-service pharmacy benefit manager (PBM) based in St. Louis. Their offerings include URAC–accredited mail-order and specialty pharmacies, a national network of retail pharmacies and comprehensive clinical programs.

“Bringing on LDI is an even bigger step as Diplomat evolves from a specialty pharmacy provider to a broader health care company,” said Phil Hagerman, CEO and chairman of Diplomat. “LDI expands Diplomat’s ability to meet growing demand from small and midsize health insurers, third-party administrators and self-insured organizations.”

Under the terms of the agreement, Diplomat will pay LDI $515 million cash and approximately $80 million in Diplomat common stock. LDI is expected to generate approximately $388 million in revenue and $41 million in adjusted EBITDA in 2017. The cash portion of the acquisition is expected to be funded by Diplomat’s new $795 million senior secured credit facility, the proceeds of which will also be used to terminate Diplomat’s outstanding credit facility.

Honigman Miller Schwartz and Cohn, and Quarles & Brady acted as legal counsel to Diplomat. J.P. Morgan Securities acted as Diplomat’s financial advisor.

JPMorgan Chase Bank and Capital One provided committed financing for the transaction. Houlihan Lokey served as the exclusive financial adviser to LDI. Goodwin Procter acted as LDI’s legal counsel.