Critical Homecare Solutions finds buyer

Wednesday, January 27, 2010

CONSHOHOCKEN, Pa. - After a failed deal in 2008, it looks like Bob Cucuel has found a buyer for Critical Homecare Solutions (CHS). BioScrip, a specialty pharmacy organization, has agreed to pay $343 million for the company, it announced Jan. 25.

"It's a good deal for both sides," said Michael Patton, a managing director with Provident Healthcare Partners, a Boston-based M&A firm. "BioScrip becomes much stronger in the infusion sector, and it also gives some complementary business lines to both companies where they can cross-sell."

Cucuel started CHS in 2006 by acquiring two mid-sized infusion companies, Specialty Pharma and New England Home Therapies. CHS has since grown to 68 home infusion and nursing locations; it reported revenues of $252 million for the year ended Sep. 30, 2009.

The Elmsford, N.Y.-based BioScrip offers pharmacy benefit management and mail order services to patients, physicians and third-party payers. BioScrip expects the combined company to generate about $1.67 billion to $1.73 billion in revenue in 2010, according to news reports.

"There is synergy to be gained, whether its purchasing power, corporate overhead or infrastructure that made a lot of sense for everyone," said one industry stakeholder familiar with the deal.

This isn't the first time CHS has been on the selling block. In February 2008, the company signed a deal with MBF Healthcare Acquisitions, a buyout company, for $534 million. That deal was renegotiated and eventually terminated later that same year.

"It's not that there aren't likely to be any hitches this time, but it's more solid when it's a match up that makes good sense," said Bob Leonard, a broker with the Braff Group, an M&A firm based in Pittsburgh, Pa. "This is a strategic buy for an existing company in a related field."

CHS is one of the largest independent providers of home infusion in the country, and one insider said it will continue to grow.

"There is an acquisition pipeline at CHS and they plan to keep that alive and look at small independent home infusion providers," he said.

The deal is expected to close in March, and insiders say Cucuel will stay on for an undetermined period of time.