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Premier Inc. To Acquire Acurity And Nexera Businesses From The Greater New York Hospital Association For Approximately $291.5M

Acurity Purchase Secures Significant Long-Term Member Relationships Nexera Purchase Accelerates Premier’s End-to-End Supply Chain Strategy With Industry-Leading Consulting and Co-management

Benzinga · 02/04/2020 12:10

Acurity Purchase Secures Significant Long-Term Member Relationships

Nexera Purchase Accelerates Premier’s End-to-End Supply Chain Strategy With Industry-Leading Consulting and Co-management Capabilities

CHARLOTTE, N.C.--(BUSINESS WIRE)-- Premier Inc. (NASDAQ:PINC), a leading healthcare improvement company, today announced that it has entered into a definitive agreement to acquire substantially all the assets and certain liabilities of Acurity, Inc. and Nexera, Inc., two indirect wholly owned subsidiaries of the Greater New York Hospital Association (“GNYHA”), for approximately $291.5 million, comprised of approximately $166.1 million in cash at close and additional estimated deferred payments of $125.4 million.

Acurity, a regional group purchasing organization (“GPO”), has been a customer and strategic partner of Premier for more than 24 years. With members comprising more than 300 hospitals and 2,700 health-related facilities, Acurity has considerable scale, accounting for approximately $68.0 million, or 10 percent, of Premier’s total net administrative fees revenue in Premier’s FY2019.

Nexera, a hospital financial improvement consulting firm, partners with healthcare organizations to improve hospital and health system performance, with a significant focus on supply chain enhancement and transformation. Nexera manages and co-manages supply chain operations for a number of Acurity clients, driving down hospital costs through rigorous processes, including value analysis, product standardization and strategic resource allocation.

Under terms of the agreement, the $291.5 million purchase price is comprised of the following: Premier will pay the sellers $125.0 million for the Acurity and Nexera businesses at close and another $120.0 million over four years, payable in $30.0 million increments each year between FY2021 and FY2024. Premier will also pay approximately $46.5 million for the estimated discounted present value of the expected Tax Receivable Agreement value for all Premier Class B Common Units that will be exchanged by GNYHA through November 2, 2020, of which $41.1 million will be paid at close and an estimated $5.4 million will be paid when a final calculation can be made.

Separately, a contingent payment opportunity of up to $30.0 million may be made to the sellers in FY2025, based on Premier’s achievement of a range of member renewals on terms to be agreed to by Premier and the sellers based on prevailing market conditions in December 2023.