Purchase price revised in Shoppers Drug Mart, Paragon Pharmacies deal
KELOWNA, British Columbia — The purchase price of Paragon Pharmacies by Shoppers Drug Mart has been revised and now stands at about $73.5 million, according to a statement issued by Paragon Pharmacies.
“The agreement entered into in connection with the transaction contemplated potential purchase price adjustments arising out of Shoppers confirmatory due diligence, which included a review of Paragon's store operating income. The maximum purchase price reduction under the due diligence adjustment provisions was $7 million. After Shoppers' due diligence review and negotiations between the parties, an adjustment of $1.5 million to the purchase price was agreed upon,” Paragon stated.
The initial purchase price was about $75 million in cash.
The transaction is currently expected to close on Aug. 1. The agreement contemplates an outside closing date of Sept. 19, 2012.
As previously reported by Drug Store News, Canadian retailer Shoppers Drug Mart is looking to acquire 19 retail pharmacies and three central fill pharmacies located in British Columbia, Alberta and Manitoba from Paragon.
The acquisition of the Paragon retail pharmacies, along with the central fill locations that service the long-term care market, will expand Shoppers' retail presence in western Canada and will provide a platform for the company's MediSystem Technologies business to enter the British Columbia and Manitoba markets.