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PharMerica Corporation Enters into Definitive Agreement to Be Acquired by KKR for $29.25 per Share in Cash

Walgreens Boots Alliance, Inc. Will Have Minority Equity Investment in New Company

Transaction Valued at Approximately $1.4 Billion

LOUISVILLE, Ky.--(BUSINESS WIRE)-- PharMerica Corporation (NYSE:PMC), a national provider of institutional pharmacy, specialty infusion and hospital pharmacy management services, today announced that it has entered into a definitive merger agreement pursuant to which a newly formed company controlled by KKR, with Walgreens Boots Alliance, Inc. (Nasdaq:WBA) as a minority investor, will acquire PharMerica. The all-cash transaction is valued at approximately $1.4 billion including the assumption or repayment of debt. Upon completion of the transaction, PharMerica will become a private company.

Under the terms of the agreement, PharMerica shareholders will receive $29.25 in cash for each share of PharMerica common stock upon closing of the proposed transaction. The price represents a premium of approximately 17 percent to PharMerica's closing share price as of the last trading day prior to announcement and a premium of approximately 18 percent to PharMerica's 90-day volume weighted average price. The acquisition agreement was unanimously approved by the Board of Directors of PharMerica.

Gregory S. Weishar, PharMerica Corporation's Chief Executive Officer, said, "Following a thorough process and review of the Company's strategic alternatives, and with the assistance of our advisors, we are pleased to have reached this agreement. This transaction will deliver immediate and compelling value to all PharMerica shareholders, as well as substantial benefits to our clients and employees."

Mr. Weishar added, "With the support of KKR and a strategic partner in Walgreens Boots Alliance, PharMerica will have additional resources and expertise to advance and grow the business. We look forward to the completion of the transaction and to achieving the meaningful benefits of this complementary relationship."

"PharMerica is an innovative leader in the institutional pharmacy industry," said Jim Momtazee, Head of KKR's Health Care investment team. "KKR and Walgreens Boots Alliance are excited to partner with PharMerica's management and employees to build upon the company's successful foundations and accelerate its future growth."

"This is an opportunity to expand into a growing segment, and to do so through a national footprint," said Alex Gourlay, Walgreens Boots Alliance co-chief operating officer. "As the healthcare landscape and patients' needs continue to change, this is another way we can support quality, affordable patient care."

KKR is making the investment primarily through its Americas XII Fund. Walgreens Boots Alliance intends to account for its minority ownership interest in PharMerica as an equity method investment.

The transaction is subject to PharMerica shareholder approval, regulatory approvals, and other customary closing conditions. PharMerica expects to complete the transaction by early 2018.

UBS Investment Bank and BofA Merrill Lynch are serving as financial advisors to PharMerica and Davis Polk & Wardwell LLP is serving as PharMerica's legal advisor.

Simpson Thacher & Bartlett LLP and Weil, Gotshal & Manges LLP are serving as legal advisors to KKR and Walgreens Boots Alliance, respectively. Fully committed debt financing will be provided by Goldman Sachs, Morgan Stanley, Wells Fargo, Jefferies and KKR Capital Markets.

Cancelling PharMerica Corporation Second Quarter Conference Call

In light of the agreement with KKR and Walgreens, PharMerica has cancelled its second quarter 2017 earnings conference call previously scheduled to be held on Friday, August 4, 2017, at 10:00 a.m. EDT. PharMerica does not intend to hold earnings conference calls during the pendency of the transaction.

About PharMerica

PharMerica Corporation is a leading provider of pharmacy services. PharMerica serves the long-term care, hospital pharmacy management services, specialty home...