Cencora Completes Acquisition of Retina Consultants of America

Rhea-AI Summary

Cencora (NYSE: COR) has completed its previously announced acquisition of Retina Consultants of America (RCA), acquiring approximately 85% interest in the leading management services organization of retina specialists. The remaining minority equity interest is retained by RCA physicians and management team members.

The transaction involved a cash outlay of $4.4 billion at closing, subject to post-closing price adjustments. This amount includes equity rollover, cash capitalization of RCA, transaction fees, expenses, and debt repayment.

The strategic acquisition strengthens Cencora's specialty leadership position and expands its MSO solutions, aiming to create differentiated value for stakeholders, including physicians and patients. Following the acquisition, Cencora has raised its Adjusted Diluted EPS guidance range to $15.15 to $15.45 for Fiscal 2025.

Positive

• Acquisition of 85% stake in leading retina specialist MSO
• Increased FY2025 Adjusted Diluted EPS guidance to $15.15-$15.45
• Strategic expansion of specialty leadership and MSO solutions

Negative

• Significant cash outlay of $4.4 billion impacting balance sheet
• Post-closing purchase price adjustment pending

Insights

Financial Analyst

The $4.4 billion acquisition of RCA marks a strategic expansion into the high-margin specialty healthcare segment. The transaction's structure, with an 85% stake acquisition while retaining key physicians through minority ownership, demonstrates a thoughtful approach to maintaining operational continuity and physician engagement. The immediate upward revision of FY2025 EPS guidance to $15.15-$15.45 indicates strong confidence in accretive benefits.

The specialty healthcare MSO model typically generates high-margin, recurring revenue streams through management fees and ancillary services. RCA's focus on retina care is particularly strategic given the aging demographic trends and increasing prevalence of conditions like diabetic retinopathy and macular degeneration. This positions Cencora to capture growing market share in a specialized segment with high barriers to entry.

Healthcare Business Strategist

This acquisition represents a significant vertical integration play in the specialty healthcare space. RCA's network of retina specialists complements Cencora's existing specialty distribution infrastructure, creating operational synergies and enhanced market access. The retention of physician ownership aligns with successful MSO models, ensuring continued clinical autonomy while leveraging corporate resources for operational efficiency.

The deal strengthens Cencora's competitive position against other healthcare services consolidators and positions them as a major player in the ophthalmology services market. The structure suggests potential for future bolt-on acquisitions and geographic expansion within the retina care segment, establishing a scalable platform for growth in specialty healthcare services.

Market Research Analyst

The ophthalmology services market is experiencing robust growth, with the retina segment particularly attractive due to increasing prevalence of age-related eye conditions and technological advancements in treatment. This acquisition gives Cencora immediate scale in this lucrative market through RCA's established network of specialists. The deal's valuation reflects the strategic premium for acquiring a leading platform in specialty healthcare services.

For investors, this represents a transformation toward higher-margin revenue streams and reduced dependency on traditional drug distribution. The immediate EPS guidance raise suggests strong near-term financial benefits, while the strategic positioning in specialty healthcare services provides multiple avenues for long-term value creation through both organic growth and additional M&A opportunities.

Acquisition Advances Specialty Leadership

Adjusted Diluted EPS Guidance Range Raised to $15.15 to $15.45 for Fiscal 2025

CONSHOHOCKEN, Pa.--(BUSINESS WIRE)-- Cencora, Inc. (NYSE: COR) today announced the completion of its previously announced acquisition of Retina Consultants of America (“RCA”), a leading management services organization (MSO) of retina specialists.

Cencora has acquired an interest in RCA of approximately 85%, with certain RCA physicians and members of the management team retaining a minority equity interest in the company. After giving effect to the equity rollover, a cash capitalization of RCA that Cencora has made, the payment of transaction fees and expenses and the repayment of debt, Cencora’s cash outlay at closing was $4.4 billion, which amount is subject to a customary post-closing purchase price adjustment. The acquisition allows Cencora to build on its leadership in specialty, expand its MSO solutions and drive differentiated value for stakeholders, including physicians and patients.

Fiscal Year 2025 Expectations

The Company does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available or cannot be reasonably estimated.

Fiscal Year 2025 Expectations on an Adjusted (non-GAAP) Basis

Cencora has updated its fiscal year 2025 financial guidance to reflect the expected contribution from the closing of the RCA acquisition and also continued momentum in the U.S. Healthcare Solutions reportable segment. The Company now expects adjusted diluted earnings per share (EPS) to be in the range of $15.15 to $15.45, raised from the previous range of $14.80 to $15.10.

Please refer to the Supplemental Information Regarding Non-GAAP Financial Measures below.

About Cencora

Cencora is a leading global pharmaceutical solutions organization centered on improving the lives of people and animals around the world. Cencora partners with pharmaceutical innovators across the value chain to facilitate and optimize market access to therapies. Care providers depend on Cencora for the secure, reliable delivery of pharmaceuticals, healthcare products, and solutions. Cencora’s 46,000+ worldwide team members contribute to positive health outcomes through the power of Cencora’s purpose: Cencora is united in its responsibility to create healthier futures. Cencora is ranked #10 on the Fortune 500 and #18 on the Global Fortune 500 with more than $290 billion in annual revenue. Learn more at investor.cencora.com.

Cencora’s Cautionary Note Regarding Forward-Looking Statements

Certain of the statements contained in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”). Such forward-looking statements may include, without limitation, statements about the transaction with RCA, the benefits of the transaction, future opportunities for Cencora and RCA and any other statements regarding Cencora’s or RCA’s future operations, financial or operating results, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, and other expectations for future periods. Words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,”, “estimate,” "expect," “intend,” “may,” “might,” “on track,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “sustain,” “synergy,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with GAAP and related standards, or on an adjusted basis; Cencora’s or RCA’s failure to achieve expected or targeted future financial and operating performance and results; the possibility that Cencora may be unable to achieve expected benefits, synergies and operating efficiencies in connection with the transaction within the expected time frames or at all; business disruption being greater than expected following the transaction; the recruiting and retention of key physicians and employees being more difficult following the transaction; the effect of any changes in customer and supplier relationships and customer purchasing patterns; the impacts of competition; changes in the economic and financial conditions of the business of Cencora or RCA; Cencora's de-leveraging plans and the ability of Cencora to maintain its investment grade rating; and uncertainties and matters beyond the control of management and other factors described under “Risk Factors” in Cencora’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC. You can access Cencora’s filings with the SEC through the SEC website at www.sec.gov or through Cencora’s website, and Cencora strongly encourages you to do so. Except as required by applicable law, Cencora undertakes no obligation to update any statements herein for revisions or changes after the date of this communication.

This press release is neither an offer to sell nor a solicitation of an offer to buy any securities of Cencora. Any such offer will only be made pursuant to a prospectus filed with the SEC or pursuant to one or more exemptions from the registration requirements of the Securities Act of 1933, as amended.

Supplemental Information Regarding Non-GAAP Financial Measure

To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), Cencora uses the non-GAAP financial measure described below. The non-GAAP financial measure should be viewed in addition to, and not in lieu of, financial measures calculated in accordance with GAAP. This supplemental measure may vary from, and may not be comparable to, similarly titled measures by other companies.

The non-GAAP financial measure is presented because Cencora’s management uses non-GAAP financial measures to evaluate Cencora’s operating performance, to perform financial planning, and to determine incentive compensation. Therefore, Cencora believes that the presentation of the non-GAAP financial measure provides useful supplementary information to, and facilitates additional analysis by, investors.

Cencora does not provide a reconciliation for this non-GAAP financial measure on a forward-looking basis to the most comparable GAAP financial measure on a forward-looking basis because it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort due to the uncertainty and potential variability of reconciling items, which are dependent on future events, are out of Cencora’s control and/or cannot be reasonably predicted, and the probable significance of which cannot be determined.

This press release includes adjusted diluted earnings per share (“EPS”), which represents diluted earnings per share determined in accordance with GAAP adjusted for specific items, including the per share impact of: gains from antitrust litigation settlements; Turkey highly inflationary impact; LIFO expense (credit); acquisition-related intangibles amortization; litigation and opioid expenses (credit); acquisition-related deal and integration expenses; restructuring and other expenses; impairment of goodwill; the gain on the divestiture of non-core businesses; the gain (loss) on the currency remeasurement related to 2020 Swiss tax reform; and the gain (loss) on the remeasurement of an equity investment, in each case net of the tax effect calculated using the applicable effective tax rate for those items. In addition, the per share impact of certain discrete tax items primarily attributable to an adjustment of a foreign valuation allowance, and the per share impact of certain expenses related to 2020 Swiss tax reform are also excluded from adjusted diluted earnings per share. Cencora’s management believes that this non-GAAP financial measure is useful to investors because it eliminates the per share impact of items that are outside the control of Cencora or that are not considered to be indicative of ongoing operating performance due to their inherent unusual, non-operating, unpredictable, non-recurring, or non-cash nature.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250102065485/en/

Investors:

Bennett S. Murphy

610-727-3693

Bennett.Murphy@cencora.com

Media:

Lauren Esposito

215-460-6981

Lauren.Esposito@cencora.com

Source: Cencora

FAQ

How much did Cencora (COR) pay for Retina Consultants of America?

Cencora's cash outlay for the RCA acquisition was $4.4 billion at closing, subject to post-closing price adjustments.

What percentage of RCA did Cencora (COR) acquire?

Cencora acquired approximately 85% interest in RCA, with the remaining minority stake retained by RCA physicians and management team members.

What is Cencora's (COR) updated EPS guidance for FY2025?

Cencora raised its Adjusted Diluted EPS guidance range to $15.15 to $15.45 for Fiscal 2025.

How will the RCA acquisition impact Cencora's (COR) business?

The acquisition strengthens Cencora's specialty leadership position, expands its MSO solutions, and aims to create differentiated value for stakeholders, including physicians and patients.