On Nov. 20, H.D. Smith and AmerisourceBergen announced that the companies have signed a definitive agreement under which AmerisourceBergen will purchase H.D. Smith, the largest independent pharmaceutical wholesaler in the U.S., for $815 million in cash. AmerisourceBergen plans to fund the acquisition through the issuance of new long-term debt. The transaction is subject to regulatory review and other closing conditions and is expected to close in the first part of 2018.
AmerisourceBergen provides pharmaceutical products and services to health care providers, veterinary practices and livestock producers. The company is ranked 11 on the Fortune 500 list, with more than $150 billion in annual revenue. Headquartered in Valley Forge, Pennsylvania, AmerisourceBergen has 20,000 employees and a presence in more than 50 countries around the world.
Founded in 1954 and headquartered in Springfield, Illinois, H.D. Smith has grown to become the largest privately held national wholesaler, with 10 distribution facilities throughout the country. The company distributes prescription and specialty pharmaceuticals, consumer products, home health care supplies, medical equipment, and more. H.D. Smith also operates CompleteCare Pharmacy, Smith Medical Partners, and Valley Wholesale Drug. H.D. Smith subsidiaries Triplefin, a pharmaceutical brand support provider, and Arete Pharmacy Network, a pharmacy services administrative organization, are not included in this transaction.
A joint statement from companies announcing the sale described H.D. Smith’s role in the market. “The company creates value and an extraordinary customer experience by impacting the health care supply chain. Bridging the gap between manufacturer and patient, H. D. Smith’s specialty solutions division offers a unique suite of strategic programs for patient access on behalf of pharmaceutical suppliers.”
Henry Dale Smith, a pharmacist by trade, founded H.D. Smith in January 1954. His son Chris currently serves as president and CEO of H.D. Smith, LLC while son Dale is chairman and CEO of H.D. Smith Holding Co. The company was recognized as one of Springfield Business Journal’s “Best Places to Work” in 2008.
“The acquisition of H.D. Smith — a best-in-class private distributor with facilities across the country and a diversified customer base — strengthens our core business and expands and enhances our strategic scale in U.S. pharmaceutical distribution,” said Steven H. Collis, chairman, president and CEO of AmerisourceBergen. “This acquisition also builds upon our foundation and meaningfully expands our support for independent community pharmacies. We remain committed to building our business to meet the evolving needs of our customers, driving long-term value for the health care system and delivering compelling returns for our shareholders. Importantly, we are united in our responsibility to create healthier futures.”
H.D. Smith currently has approximately 1,000 employees nationwide, with a local workforce of 375 people. In 2003, the company built a new 30,000 sq. ft. headquarters in the Park South business park. For the past 10 years, H.D. Smith has also been leasing office space at 3201 West White Oaks Dr., although earlier this month those employees began moving to a leased space in the Wells Fargo building on West Wabash Ave.
When asked how the upcoming sale of the company would impact the local locations and employees, Dale Smith stated, “At this time, we are operating as business as usual, and do not have information as to the potential changes, if any, to any of our locations or workforce, including Springfield. Until the deal closes, both companies must continue to operate independently in the marketplace. At that time, the companies can then begin discussions on how we will work together.”
“Our ultimate priority and commitment has been, and continues to be, the needs of our customers and trading partners,” said Dale. “Working toward a common goal, H.D. Smith associates have been committed to providing the best customer experience with a focus on honesty and integrity. We remain proud of our contributions to improve healthcare across the country, and we are honored to have supported the success of community healthcare providers and our manufacturer partners. We believe AmerisourceBergen will continue the strong foundation set by my father. In joining AmerisourceBergen, we are confident our mission will continue, and remain a point of pride for the H.D. Smith family and its enduring legacy.”