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BioScrip Closes CarePoint Buyout - Analyst Blog

Posted: 8/27/2013 2:33:00 PM
Referenced Stocks: BIOS;DVA;GNC;HLF;ROC

Recently, BioScrip Inc. ( BIOS ) closed the acquisition of Ohio-based CarePoint Partners Holdings and its subsidiaries. Earlier in June, BioScrip had inked a definitive agreement to take over CarePoint Partners in a bid to expand its home infusion business. 

CarePoint Partners is a provider of home and alternate-site infusion therapy for complex, acute and chronic illness across the U.S. It has 28 service sites in nine states, concentrated in the Gulf Coast and East Coast regions. As a leading national provider of infusion therapy to about 20,500 patients on an annual basis, CarePoint Partners expects to generate annual revenues of $160 million.

This lucrative acquisition is expected to leverage BioScrip's top-line. It should also boost the company's return on capital (ROC) going forward. Moreover, post integration (12-15 months), the acquisition is expected to improve the long-term growth prospects of the company.

Following the acquisition, BioScrip will serve over 0.1 million patients across the U.S. with its home infusion services. The company also expects to improve standards of patient care. As per management, the deal will support BioScrip in achieving its growth targets in the long term.

According to the company, the acquisition is well aligned with BioScrip's strategy to develop a solid foothold in the domestic market for its mainstay infusion business. Further, the recent acquisition only reinforces the fact that BioScrip keeps a keen eye out for strategic takeovers from time to time, the last one being DaVita 's ( DVA ) majority-owned subsidiary HomeChoice Partners in Feb, 2013. 

We expect these acquisitions to allow market expansion and support consolidation efforts in a highly fragmented industry. These acquisitions should boost BioScrip's long-term growth potential.  

On the tepid side, BioScrip continues to battle widening losses over the past few quarters. The company also faces a tough competitive landscape with larger players with deeper resources. 

Currently, the stock carries a Zacks Rank #3 (Hold). While we remain on the sidelines for BioScrip, other stocks such as GNC Holdings Inc. ( GNC ) and Herbalife Ltd. ( HLF ), carrying Zacks Rank #2 (Buy) warrant a look. 

BIOSCRIP INC (BIOS): Free Stock Analysis Report

DAVITA INC (DVA): Free Stock Analysis Report

GNC HOLDINGS (GNC): Free Stock Analysis Report

HERBALIFE LTD (HLF): Free Stock Analysis Report

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