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05/08/2018

Fred’s finds its specialty pharmacy buyer

Fred’s has found the buyer for its specialty pharmacy business — and it’s a company that’s no stranger to acquisitions. The Memphis-based retailer said Tuesday that it would be selling the unit, EntrustRx, to a CVS Health subsidiary for $40 million, plus the value of the specialty pharmacy’s inventory.

“One of Fred’s top priorities for 2018 has been to monetize non-core assets and we are pleased to have reached an agreement for the sale of EntrustRx,” Fred’s interim CEO Joe Anto said. “The cash proceeds will allow us to pay down a significant portion of our debt and also be used for general corporate purposes.”

The sale of the specialty pharmacy business follows a difficult year for Fred’s, for which the company posted a $139.3 million net loss. As it looks to cut its debt load, the company also is shopping some of its real estate assets, and also is weighing its options for its retail pharmacy business. Fred’s is under interim leadership following the resignation of CEO Mike Bloom at the end of April.

CVS Health is coming off of a solid first quarter, during which its pharmacy services segment grew revenue by 3.2%, driven partially by an increase in specialty claim volume. It currently is working to close its acquisition of Aetna, which CEO Larry Merlo said was anticipated in the second half of the year
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