Allion Healthcare Signs Definitive Agreement to Acquire Biomed America, a Leading Provider of Home Infusion and Specialty Pharmacy Services Focused On Patients with Chronic Conditions

 

Acquisition Highlights:

Ø  Extends Allion’s leadership in serving patients with incurable, chronic conditions

Ø  Expands Allion’s target markets to include patients with immune deficiencies, hemophilia and other chronic conditions

Ø  Diversifies the Company’s payor mix by increasing revenue from non-governmental payors

Ø  Provides Allion with six additional pharmacy distribution centers

Ø  Expected to accelerate revenue growth and margin expansion

 

MELVILLE, NEW YORK – March 13, 2008 – Allion Healthcare (Nasdaq: ALLI) today announced that it has signed a definitive merger agreement to acquire 100% of the outstanding stock of Biomed America, Inc. (“Biomed”). Biomed is a leading provider of specialized biopharmaceutical medications and services to chronically ill patients. The transaction is expected to close within sixty days, subject to the satisfaction of customary closing conditions, including Hart-Scott-Rodino clearance.

 

Financial Considerations

The $117.8 million purchase price consists of $48.0 million in cash and a total of 9.35 million shares of Allion common and Series A preferred stock valued at $51.4 million based on the closing share price on March 12, 2008 of $5.50, plus the assumption of up to $18.6 million of debt. In addition, Allion may make an earn-out payment in 2009 if Biomed achieves certain financial performance benchmarks during the first 12-month period post closing.

 

The purchase price is expected to be paid with funds from new senior credit facilities, available cash, and newly issued Allion common and preferred stock.  To fund the transaction, Allion has received a commitment for $55 million in senior secured credit facilities from CIT Capital Securities LLC.  CIT Capital Securities LLC served as the exclusive financial advisor to Allion on the transaction.

 

In accordance with NASDAQ Marketplace Rule 4350(i)(1)(C), Allion intends to issue to Biomed shareholders new common stock up to 19.9% of current common shares outstanding with the remainder of the stock portion of the purchase price being issued in new Series A preferred stock. After closing the transaction, Allion intends to seek shareholder approval to convert the newly issued preferred stock into Allion common stock. The Biomed stockholders as a group will have the right to nominate two out of the six members of the Allion board of directors, subject to approval by the other board members and meeting independence requirements.

 

Strategic Fit

Allion’s specialty pharmacy HIV/AIDS disease management model enables HIV/AIDS patients to more effectively comply with the treatment regimens prescribed by their physicians.  With its focus on providing infused and injected drugs to patients with other chronic conditions, Biomed has developed a first in class reputation among referring physicians and patients managing hemophilia, immune deficiencies and other chronic conditions.  Biomed offers Allion an opportunity to apply its core service philosophies to other important segments of the specialty pharmaceutical market. 

 

Michael Moran, Chairman and CEO of Allion commented, “A consistent high level of service and treatment adherence is a critical issue for any chronically ill patient requiring pharmaceuticals to manage their disease. Physicians and their patients value a specialty pharmacy provider with a clinically focused service model that delivers improved clinical outcomes and cost containment.  Biomed’s proven and scalable service offering, and broad sales team, provides Allion with a strong platform to enter new markets for the chronically ill.  We are very excited about the transaction and welcome the opportunity to work with Biomed’s patients, referring physicians and employees.”

 

Financial Impact

For the quarter ended December 31, 2007, Biomed’s unaudited financial statements reflected adjusted net revenue of $13.3 million and adjusted earnings before depreciation, interest, taxes and amortization of $3.7 million.  

 

Conference Call

Allion Healthcare will hold a conference call to discuss the acquisition and announce financial results for the fourth quarter and year ended December 31, 2007, after the close of U.S. financial markets on Thursday, March 13, 2008 at 5:00 p.m. ET; 2:00 p.m. PT on Thursday, March 13, 2008.