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Shoppers Drug Mart, Paragon Pharmacies adjust deal
July 6th, 2012
KELOWNA, British Columbia – Shoppers Drug Mart Corp. will end up paying slightly less in its deal to acquire Paragon Pharmacies Ltd.
Paragon said this week that after Shoppers Drug Mart performed its due diligence for the acquisition, including a review of the western Canada drug chain's store operating income, the companies agreed on a price adjustment of $1.5 million (Canadian), lowering the purchase price to $73.5 million. The maximum price reduction under the agreement was $7 million.
Under the cash deal announced in late May, Shoppers Drug Mart plans to acquire Paragon's 19 retail pharmacies and its three central fill pharmacies in British Columbia, Alberta and Manitoba.
Paragon shareholders still must approve the agreement. The company said it has scheduled annual general and special shareholders meeting for July 26 in Winnipeg, Manitoba.
The transaction is expected to close on Aug. 1, subject to closing conditions. The agreement includes an outside closing date of Sept. 19.
A publicly traded company on the TSX Venture Exchange (stock symbol "PGN"), Kelowna, B.C.-based Paragon has more than 400 employees and nine drug stores in Alberta, eight in British Columbia and two in Manitoba. It also operates three walk-in health clinics in Calgary, Alberta, plus central fill facilities in Winnipeg, Manitoba, and in Kelowna and Richmond, B.C.
When the acquisition was announced, Shoppers Drug Mart said the addition of Paragon's drug stores and central fill facilities, which serve the long-term care market, will boost its presence in western Canada and clear the way for its MediSystem Technologies Inc. business to enter the British Columbia and Manitoba markets.