The directors of supply chain and analytics services provider Premier Inc. have begun a process to examine the Charlotte-based company’s strategic options, a move that could result in a sale of some or all of its operations.
Word of the move by the Premier board to set up a special committee made up of independent directors comes less than a week after Premier President and CEO Mike Alkire and his team lowered their outlook for what remains of the company’s fiscal 2023 in part because some clients are holding off on committing to license and consulting work.
“Evolving market dynamics, coupled with an uncertain and challenging operating environment, compel us to take further action,” Alkire said in a May 8 statement. “While we conduct this strategic evaluation, we remain as focused as ever on supporting our members and other customers in providing high-quality, cost-effective healthcare and delivering on our mission to improve the health of communities.”
Premier leaders said a recapitalization or other partnership are also options for the company, which is on track to generate about $520 million in adjusted EBITDA on roughly $1.4 billion in revenues in the fiscal year that will end June 30.
“Premier has a wide range of strategic options to review,” Board Chair Terry Shaw said. “The board believes that this process will help ensure the company is on the best path forward to unlock value for all of Premier’s stakeholders.”
Bankers with JPMorgan Securities and attorneys from Cravath Swaine & Moore are advising the board’s special committee. BofA Securities and McDermott Will & Emery also work with the company more generally.
Shares of Premier (Ticker: PINC) rose about 4 percent to $27.54 in early trading May 9. That gain took them only marginally above where they closed May 2 on the heels of executives reporting earnings and taking down 2023’s guidance.