AmerisourceBergen agreed to buy PharMEDium Healthcare Holdings for $2.58 billion from private equity firm Clayton, Dubilier & Rice to boost its drug distribution business.
PharMEDium provides compounded intravenous and local anesthesia products to hospitals in the United States.
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Compounding involves creation of a product to meet unique needs of a patient when commercially available drugs don't work.
As the costs of compounding rise, hospitals are increasingly relying on large-scale firms such as PharMEDium to meet their needs.
The acquisition is expected to add 22-26 cents to AmerisourceBergen's adjusted earnings per share in 2016 and generate savings of about $30 million, the company said on Tuesday.
Lake Forest, Illinois-based PharmMEDium filed for a $100 million IPO in August, planning to list on the New York Stock Exchange.
Morgan Stanley is the financial adviser to AmerisourceBergen, while J.P. Morgan Securities and Credit Suisse advised PharMEDium.
(Reporting by Amrutha Penumudi in Bengaluru; Editing by Sriraj Kalluvila)