CVS completes $1.9B Target pharmacy acquisition

WOONSOCKET – CVS Health Corp. has completed the acquisition of Target Corp.’s pharmacy and clinic businesses for approximately $1.9 billion, the companies said Wednesday.
CVS Health acquired Target’s 1,672 pharmacies in 47 states and will brand them as CVS/pharmacy.
A CVS/pharmacy also will be included in all new Target stores that offer pharmacy services. Seventy-nine Target clinic locations will be rebranded as MinuteClinic, and CVS Health will open up to 20 new clinics in Target stores within three years of the close of the transaction, according to a company news release.
The transition is expected to take place within six to eight months.
Said Larry Merlo, CVS Health president and CEO, “With the Target acquisition, we will leverage our unique integrated business model and our scale to drive incremental sales volume and operating profit for the enterprise while providing convenience and cost savings to consumers and payors.”
In other news, CVS increased its dividend and raised the low end of its 2016 earnings forecast range.
The quarterly cash dividend was increased 21 percent, or 42.5 cents per share, which translates to $1.70 per share annually. The increased quarterly dividend will be payable on Feb. 2 to shareholders of record. This marks the company’s 13th consecutive year of dividend increases, the company said.
The company raised the midpoint of its 2016 outlook and now expects adjusted earnings per share to be between $5.73 to $5.88, reflecting year-over-year growth of 11.25 percent to 14.25 percent. The bottom end of the range was increased by 5 cents per share from the preliminary outlook provided during the third-quarter earnings call, CVS said.

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