Express Scripts Holding Co : Express Scripts Plans to Exit Several Noncore Businesses
08/10/2012| 12:25pm US/Eastern
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--Express Scripts plans to divest noncore businesses, most of which came from Medco deal
--Company doesn't expect material financial impact
--Company dissolving joint venture in China, winding down European businesses
Express Scripts Holding Co. (ESRX) identified on Friday several businesses, including a diabetes-testing-supply unit, that it plans to unload because they aren't core parts of the company's pharmacy-benefit operations.
Most of the business Express Scripts plans to divest come from Medco Health Solutions, a fellow pharmacy-benefit manager Express Scripts bought for $29.1 billion in April to become the industry's biggest firm. Pharmacy-benefit managers run drug benefit programs for health plans and corporate clients.
Express Scripts plans to divest the diabetic-testing-supply business and related businesses under its Liberty Medical brand, the company said in a regulatory filing. Medco bought Liberty's parent, PolyMedica Corp., for about $1.5 billion in 2007.
Express Scripts also plans to divest certain units from its United BioSource subsidiary, which is a medical-research organization Medco acquired in 2010 for about $730 million.
Express Scripts also said it plans to dissolve its joint venture in China, wind down business in Germany and France and exit its European headquarters in Amsterdam.
During a conference call Wednesday, Express Scripts indicated it was looking at strategic alternatives for certain noncore businesses, but didn't provide details on which ones it might cut loose. The company Friday said it provided the additional details in communications with employees.
"We do not expect the ultimate disposition of these businesses to have a material impact on our financial results," Chief Financial Officer Jeffrey Hall said during Wednesday's call. He also said the company was looking at businesses that "don't have the return on invested capital metrics that we'd like to see."
Express Scripts shares recently traded down 1.1% to $61.82, but they are up about 38% on the year.
Write to Jon Kamp at jon.kamp@dowjones.com
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