Six weeks after announcing a strategic review, the leaders of Charlotte-based Premier Inc. have struck a deal to divest its non-healthcare businesses to a fellow group-purchasing venture.
Omnia Partners Inc. has agreed to pay $800 million in cash to Premier to pick up contracts with organizations in the education, hospitality and recreation sectors, among others. Financial details about the units being acquired haven’t been disclosed but, through the first nine months of Premier’s fiscal 2023, the company’s broader supply chain services group produced adjusted EBITDA of $371 million on revenues of $672 million.
“We are excited to enhance our focus on our member services and core healthcare businesses,” Premier President and CEO Mike Alkire said in a statement. “At the same time, we are evaluating the highest return opportunities for deploying the proceeds from this transaction, including the potential to accelerate the return of capital to stockholders.”
Alkire and the board of Premier last month said they would look into the company’s strategic options, including selling parts or all of the business. That word came shortly after an earnings warning based on some healthcare clients postponing contract commitments.
Omnia, which is based in the Nashville area, has its roots in the 2001 founding of Horizon Resource Group. The organization was acquired by Vizient in 2013 but spun out again three years later with backing from private-equity giant TA Associates. In 2017, it was renamed Omnia when it acquired Prime Advantage and Corporate United and has since—and since 2020 with additional financial muscle from Leonard Green & Partners—bought peers to enter or build up its business in the apartment, nonprofit and government purchasing markets. (Last month, it took part in a $6 million funding round for a company catering to vacation rental properties.)
The companies’ agreement calls for their deal to close in the next 90 days (with a 30-day extension) and, should it be called off for certain reasons, Omnia will need to pay Premier $40 million in cash. Premier clients will also maintain access to their contracts with the company for at least 10 years and Premier and Omnia will have “aligned growth incentives” to keep customers with Premier through that time.
Shares of Premier (Ticker: PINC) were up more than 5 percent to about $27.25 June 15 on the heels of the news. They are, however, still down nearly 20 percent over the past six months, a drop that has trimmed the company’s market capitalization to about $3.2 billion.