8-KRegulation FDOther EventsExhibits & Filings

Cencora, Inc. 8-K Report, Regulation FD Disclosure (May 21, 2013)

Filed May 21, 2013For Securities:COR

Summary

Cencora, Inc. (formerly AmerisourceBergen Corporation) filed an 8-K on May 20, 2013, to report on key updates regarding its strategic relationship with Walgreens and Alliance Boots. The company reiterated its financial performance expectations for fiscal year 2013, including projected revenue growth of 11% to 13% and adjusted diluted earnings per share (EPS) from continuing operations in the lower half of the $3.04 to $3.14 range. Importantly, Cencora reaffirmed that the significant agreements with Walgreens and Alliance Boots are expected to contribute an incremental $25 billion in revenues and approximately 20 cents to adjusted EPS in fiscal year 2014. The filing also announced the receipt of regulatory approval for Walgreens and Alliance Boots to acquire an equity stake in Cencora. This strategic partnership, initially announced in March 2013, includes a ten-year primary pharmaceutical distribution contract and access to generics through a joint venture. As part of this, Walgreens and Alliance Boots have rights to purchase up to 7% of Cencora's equity in the open market and have been granted warrants for an additional 16% aggregate equity stake, exercisable in tranches starting in March 2016 and March 2017 at specified prices. The company also noted that Walgreens will gain board representation upon achieving certain equity ownership thresholds.

Key Highlights

  • 1Cencora reiterated its FY2013 financial outlook: revenue growth of 11%-13% and adjusted diluted EPS in the lower half of $3.04-$3.14.
  • 2The strategic partnership with Walgreens and Alliance Boots is projected to add $25 billion in revenue and ~20 cents to adjusted EPS in FY2014.
  • 3Regulatory approval has been secured for Walgreens and Alliance Boots to acquire an equity stake in Cencora.
  • 4Walgreens and Alliance Boots have rights to acquire up to 7% of Cencora's equity in the open market.
  • 5Equity warrants have been granted to Walgreens and Alliance Boots for an aggregate of 16% of Cencora's fully diluted equity.
  • 6The first tranche of warrants (8%) has a $51.50 strike price, exercisable starting March 2016.
  • 7Walgreens will be granted board representation upon reaching a 5% equity stake and further upon exercise of the first warrant tranche.

Frequently Asked Questions

Cencora reiterated its expectations for fiscal year 2013, projecting revenue growth in the 11% to 13% range. Adjusted diluted earnings per share from continuing operations are expected to be in the lower half of the $3.04 to $3.14 range, excluding certain specified expenses and charges.

The agreements with Walgreens and Alliance Boots are expected to contribute significantly to Cencora's financial performance in fiscal year 2014. The company anticipates an incremental $25 billion in revenues and approximately 20 cents in adjusted earnings per share from continuing operations, net of certain expenses and charges.

Walgreens and Alliance Boots have received regulatory approval to purchase an equity stake in Cencora. They have the right to acquire up to 7% of the company's fully diluted equity in the open market. Additionally, Cencora has granted them equity warrants for an aggregate of 16% of its fully diluted equity, exercisable in two tranches starting in March 2016 and March 2017, with strike prices of $51.50 and $52.50, respectively.

Yes, Walgreens will have the ability to appoint one director to Cencora's board once Walgreens and Alliance Boots collectively acquire a 5% equity stake in the company. A second director appointment right will be triggered upon the full exercise of the first tranche of warrants.