AmerisourceBergen Corp. has agreed to sell its Canadian pharmaceutical distribution business to Kohl & Frisch Ltd., a Canadian-owned national full-line distributor.


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AmerisourceBergen to sell Canadian distribution unit

March 28th, 2013

VALLEY FORGE, Pa. – AmerisourceBergen Corp. has agreed to sell its Canadian pharmaceutical distribution business to Kohl & Frisch Ltd., a Canadian-owned national full-line distributor.

AmerisourceBergen said Thursday that the estimated sale price for AmerisourceBergen Canada Corp. (ABCC) is expected to be $80 million to $100 million, of which about half will be financed by AmerisourceBergen.

The transaction is slated to close by the end of May, pending customary closing conditions and regulatory approvals, Kohl & Frisch reported.

AmerisourceBergen said it will retain its Canadian specialty drug business. ABCC accounted for about 2% AmerisourceBergen's total revenue, according to the company.

The deal comes just over a week after AmerisourceBergen formed a long-term strategic partnership with Walgreen Co. and Alliance Boots.

Under that agreement, Walgreens and AmerisourceBergen plan to broaden their current relationship beyond the specialty items distributed by AmerisourceBergen to a 10-year primary distribution agreement for branded and generic drugs. AmerisourceBergen also will get global supply-chain opportunities with the Walgreens-Alliance Boots joint venture, while Walgreens and Alliance Boots receive the right to buy an equity stake in AmerisourceBergen.

Kohl & Frisch (K&F), which described itself as the only Canadian-owned national pharmaceutical distributor, said the addition of ABCC will bring significant operational efficiencies plus strengthen its position in key regional markets. K&F currently has distribution centers in six provinces, and ABCC has operations in seven provinces.

"I have long admired AmerisourceBergen as a global leader in the health care industry, and so the opportunity to acquire their Canadian distribution business was very exciting," K&F president and chief executive officer Ron Frisch said in a statement. "AmerisourceBergen Canada's national infrastructure and strong customer relationships are tremendous assets, and we view their business as an ideal complement to our existing operations across Canada."

K&F noted that the purchase of ABCC comes days before the institution of the April 1 changes to generic drug pricing across Canadian provinces, which the company said "threaten to impose significant financial strain" across the pharmaceutical supply chain.

"In this challenging economic environment, K&F views the acquisition of ABCC as reinforcing its long-standing commitment to serving as a leading full-service partner to Canadian pharmacy," K&F stated.

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