Premier Inc., a health-care company that sells services and supplies to thousands of hospitals and providers, rose in after-hours trading on news it’s evaluating strategic options, including a sale.
(Bloomberg) — Premier Inc., a health-care company that sells services and supplies to thousands of hospitals and providers, rose in after-hours trading on news it’s evaluating strategic options, including a sale.
The board established a committee of independent directors to evaluate alternatives “including a sale of part or all of the company, recapitalization or other partnership opportunities,” Premier said Monday in a statement.
The company has seen revenue shrink after helping hospitals through the Covid-19 pandemic. Chief Executive Officer Michael Alkire said in the release “evolving market dynamics, coupled with an uncertain and challenging operating environment” spurred the review.
Premier shares jumped as much as 9.7% after the end of normal trading hours in New York. They’d fallen 24% this year through Monday’s close.
There’s no guarantee the process will result in a transaction, the company said. Premier affirmed its fiscal year 2023 guidance and doesn’t expect to provide a 2024 forecast when it reports annual results in August.
Premier works with medical providers, offering group purchasing and other supply services, as well as data and technology services. The company’s expertise is in hospital systems’ complex supply chains, which were thrown into chaos as a result of Covid-19.
Premier’s revenue has declined since the height of the pandemic. Net revenue for the nine months ending March 31 was just under $1 billion, down about 9% from the same period a year earlier. Net income to shareholders in the same period was down about 35%, according to a filing.
Hospitals in particular have faced higher labor costs and other operational challenges coming out of the pandemic.
The independent committee will evaluate options “that may involve actual or potential conflicts of interest,” according to the company’s statement. It’s being advised by JPMorgan Securities. BofA Securities Inc. is serving as Premier’s financial adviser.
(Updates with additional details throughout.)
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