PHARMERICA (Nasdaq: DOSE) and INTEGRATED HEALTH SERVICES (NYSE: IHS) have reached an agreement in principle regarding the future of National Institutional Pharmaceutical Services, Inc., (NIPSI) and will move directly toward a definitive agreement. Under terms of the proposed transaction, PharMerica has agreed to acquire NIPSI, an institutional pharmacy owned by IHS. NIPSI operates 35 pharmacies in 15 states serving approximately 38,000 beds. The two companies agreed that under the proposed transaction, the preferred provider agreement would apply to all of IHS's long-term care facilities nationwide, including 139 newly acquired Horizon locations.
From the research that I have access to, this deal if it happens, should expand earnings forecasts because it was recognized as a possibility, but not factored into most forecasts.This should bode well for price appreciation through positive earnings surprises and possible PE multiple expansion as DOSE becomes the recognized industry leader in the institutional pharmacy industry.Barring unforseen events, $20 to $24 per share over the next 12 months is very feasable.
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