Drug distributor Cencora plans to buy Retina Consultants of America from Webster Equity Partners in a $4.6 billion deal.
RCA is a management services organization that operates a network of retina specialists and the deal will bolster Cencora’s specialty drug business.
“The acquisition of RCA will allow Cencora to broaden our relationships with community providers in a high growth segment and build on our leadership in specialty,” said Bob Mauch, president and CEO of Cencora in a statement. “With a compelling value proposition for physicians, an impressive leadership team and strong clinical research capabilities, RCA is well-positioned at the forefront of retinal care. We intend to use our leading operational infrastructure to help RCA enhance the provider experience, drive innovative new research and create better outcomes for patients.”
“Following our recent investment in OneOncology, the addition of RCA will allow us to expand our MSO solutions and drive differentiated value across the healthcare system for manufacturers, providers and patients,” Mauch said.
RCA is the leading MSO in the retina space, Cencora said, and the deal will add nearly 300 retina specialists across 23 states to the company’s portfolio of physician management services.
Cencora, formerly known as AmerisourceBergen, and peers Cardinal Health and McKesson are expanding their presence in the specialty market.
Cencora picked up a minority interest in OneOncology alongside TPG’s majority interest in a spring 2023 deal valuing the cancer care network at $2.1 billion. In August, McKesson unveiled a deal to purchase a controlling stake in a unit of Florida Cancer Specialists & Research Institute for nearly $2.5 billion. In September, Cardinal Health announced plans to acquire Integrated Oncology Network, a collection of more than 50 community oncology centers, for just over $1.1 billion.
Anti-monopoly advocacy group American Economic Liberties Project and a small cadre of other advocacy organizations are urging federal regulators to block the Cardinal and McKesson oncology practice network deals.
The acquisition of RCA expands Cencora’s leadership in specialty, executives said. As the specialty landscape continues to evolve, providers are increasingly seeking partners to assist with managing their practices while retaining their autonomy and patient-centric approach. The addition of RCA will “add to Cencora’s capabilities in specialty and expand its MSO business, broadening physician and manufacturer relationships as well as Cencora’s value proposition to all its stakeholders,” executives said in a press release.
RCA also operates a premier clinical research network with 40 clinical trial sites spanning Phases I-IV and 400 dedicated full-time research employees. “Cencora expects to use its suite of manufacturer services to enhance RCA’s research program and outcomes, maintaining its position as a partner of choice to pharmaceutical innovators in the retina space,” the company said.
Cencora said Friday it will acquire RCA for approximately $4.6 billion in cash, subject to a customary working capital and net-debt adjustment. RCA’s affiliated practices, physicians and management will retain a minority interest in RCA, with Cencora holding approximately 85% ownership in RCA upon closing.
Cencora also will potentially pay up to $500 million in aggregate contingent consideration in fiscal year 2027 and fiscal year 2028, subject to the successful completion of certain predefined business objectives, the company said.
The company plans to fund the transaction through a combination of existing cash on hand and new debt financing. Upon closing, the acquisition of RCA is expected to be approximately $0.35 accretive, net of estimated financing costs, to Cencora’s adjusted diluted EPS (a non-GAAP financial measure defined herein) for its first twelve months.
“We are pleased to enter our next phase of growth with the support of a leading global pharmaceutical solutions organization,” said Robby Grabow, RCA’s CEO.. “With additional resources to support the continued execution of our growth strategy, we will be better positioned to continue expanding our physician network and enhancing the quality of care we provide.”
Lazard is serving as exclusive financial advisor, and Freshfields LLP, Sidley Austin LLP and Morgan, Lewis & Bockius LLP are serving as legal advisors to Cencora. Goldman Sachs & Co. LLC and Rothschild & Co are serving as financial advisors, and Goodwin Procter LLP and ReedSmith LLP are serving as legal advisors to RCA.
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