CINCINNATI and ORLANDO, Fla., July 20,
2016 /PRNewswire/ -- The Kroger Co. (NYSE: KR) today
announced an agreement for Axium Pharmacy Holdings, Inc. ("Axium")
to acquire the outstanding shares of Modern HC Holdings, Inc.
("ModernHEALTH"), a leading specialty pharmacy, to create a
combined specialty pharmacy that will operate as a wholly-owned
subsidiary of The Kroger Co.
"This strategic investment will accelerate the growth of
Kroger's health and wellness business," said Robert Clark, Kroger's senior vice president of
merchandising. "Expanding our specialty pharmacy services will
provide our customers with greater access to medications we don't
currently dispense and access to additional services without going
to another pharmacy."
ModernHEALTH, based in Orlando,
is one of the nation's largest independent providers of specialty
pharmacy services. The company employs approximately 500 associates
who provide comprehensive specialty pharmacy services including
IVIG for patients who require IV-based therapies for autoimmune and
primary immune deficiency diseases, and comprehensive medication
management for HIV, Cystic Fibrosis, Transplant, Hepatitis C,
Rheumatoid Arthritis and Dermatology.
Kroger is a leading provider of health and wellness services.
Kroger operates 2,230 pharmacy locations and195 The Little Clinic
locations. The company's pharmacists also provide health coaching,
biometric screening and other wellness services designed to deliver
positive health outcomes for patients. Axium, which became a
wholly-owned subsidiary of Kroger in 2012, is one of the nation's
largest independent providers of specialty pharmacy services,
offering a range of clinical services to patients with complex
chronic conditions.
The transaction is subject to certain regulatory approvals,
including from the FTC. Financial terms were not disclosed.
Operational Profile
Kroger pharmacy is currently the fifth-largest pharmacy operator
in the U.S. and specialty pharmacy is the primary area of growth in
pharmaceuticals. Merging ModernHEALTH and Axium into a combined
specialty pharmacy should improve purchasing efficiencies and allow
the companies to combine each other's payer strategies to bring
down costs. The combination will also allow Kroger's specialty
pharmacy business to expand into new territories in the West and
Southwestern U.S., and expand offerings to other disease
states.
"Combining Axium and ModernHEALTH's expertise with Kroger's
health and wellness services will allow Kroger to both serve more
customers who require complex drug therapies, and deliver those
therapies at greater value to customers and insurance payers," said
Mr. Clark. "The merger adds IVIG services to Kroger's specialty
pharmacy capabilities, servicing patients who require IV-based
therapies for autoimmune and primary immune deficiency diseases,
and also expands our ability to serve more patients requiring
complex therapies for Cystic Fibrosis and Rheumatoid
Arthritis."
ModernHEALTH is comprised of several business segments that
provide highly-specialized services, including: TLCRx Pharmacy,
with locations in New Orleans,
Orlando and Addison, TX, primarily providing services to
patients in Rheumatology, Dermatology, Hepatitis C and Cystic
Fibrosis; Biofusion, based in Torrance,
CA, serving patients requiring Subcutaneous Immune Globulin
(SCIG) and IV Immune Globulin (IVIG) for autoimmune and primary
immune deficiency diseases; ModernHEALTH Specialty Pharmacy, with
two sites in Southern California,
focusing on HIV, Transplant and Cystic Fibrosis therapies; and two
home infusion pharmacies in Dothan,
AL and Richardson, TX.
Headquartered in Lake Mary,
Florida, Axium employs 300 associates who provide a range of
clinical services to patients with complex chronic conditions
through locations in California,
Puerto Rico, Tennessee and Mississippi. Axium provides drug therapies and
patient-support services to treat chronic, genetic and other
complex medical conditions such as cancer, Hepatitis C, Rheumatoid
Arthritis, Multiple Sclerosis and numerous other chronic care
conditions.
Headquarters for the combined specialty pharmacy will be located
in a new facility under construction in Lake Mary, FL, with continued support from
existing facility locations. The combined organization will employ
approximately 800 associates and will continue to operate as an
independent company within the Kroger family.
"We are very excited to welcome ModernHEALTH's leadership team
and all 500 current associates to the Kroger family," said Mr.
Clark.
"Our partnership with Kroger and Axium will enable us to provide
more customers in more places with the critical specialty pharmacy
services they need," said Dom Meffe, ModernHEALTH's CEO. "We
believe this relationship will create efficiencies, accelerate
growth in the high-growth specialty pharmacy market, and improve
the overall quality of our combined healthcare services. We are
also pleased that this partnership means our business headquarters
will remain and grow in Orlando."
With over 20 years of experience in the specialty pharmacy
space, Mr. Meffe will lead the new combined business as
CEO after close. Before leading ModernHEALTH, Mr. Meffe was founder
and CEO of Curascript Pharmacy, a company he led before selling to
Express Scripts.
Axium's CEO, Mark Montgomery,
will help ensure a smooth transition after the merger closes. His
future plans will be announced at a later date. Mr. Montgomery has
been with Axium for 13 years, the last 10 as president and CEO.
With nearly 30 years of healthcare leadership experience, he has
held instrumental management roles with multiple leading nationwide
specialty pharmacy providers.
Jefferies LLC served as ModernHEALTH's financial advisor, and
Ropes and Gray LLP acted as ModernHEALTH's legal advisor.
Jones Day acted as legal advisor to
Kroger.
Every day, the Kroger Family of Companies makes a difference in
the lives of eight and a half million customers and 431,000
associates who shop or serve in 2,778 retail food stores under a
variety of local banner names in 35 states and the District of Columbia. Kroger and its
subsidiaries operate an expanding ClickList offering – a
personalized, order online, pick up at the store service – in
addition to 2,230 pharmacies, 785 convenience stores, 323 fine
jewelry stores, 1,400 supermarket fuel centers and 38 food
production plants in the United
States. Kroger is recognized as one of America's most
generous companies for its support of more than 100 Feeding America
food bank partners, breast cancer research and awareness, the
military and their families, and more than 145,000 community
organizations including schools. A leader in supplier diversity,
Kroger is a proud member of the Billion Dollar
Roundtable.
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SOURCE The Kroger Co.