Network Pharmaceuticals (NPI)

Background

Network Pharmaceuticals, Inc. d/b/a Network Pharmacies (“NPI” or the “Company”) operates twenty-three pharmacies around the greater Los Angeles, California area. Twenty-one of these locations operate as full service retail pharmacies, selling both branded and generic pharmaceuticals from their strategic locations inside medical office buildings and hospitals. NPI also operates a wholesale pharmacy, which supplies pharmaceuticals to local physician groups and healthcare providers, and a “closed-door” pharmacy, which specializes in providing prescription delivery services to institutional patients residing in hospice, long-term care, and mental health facilities.

The Situation

The shareholders of NPI retained KPMG Corporate Finance as its exclusive advisor in the sale. The shareholders elected to sell the business in order to focus their resources on other healthcare industry ventures. In doing so, their objectives were to partner the Company with a buyer that was committed to the business model and the employees, while placing an appropriate value on the business.

The Transaction

KPMG Corporate Finance conducted a competitive sale process to identify strategic and financial acquirers that would enable the shareholders to exit the business, meet the seller’s desired valuation expectations, and position the Company for future growth. KPMG Corporate Finance developed significant buyer interest, coordinated management meetings, and negotiated a transaction with Longs Drug Stores Corporation, a New York Stock Exchange traded provider of retail drug and pharmacy benefit services located in California. Throughout the sale process, we advised the shareholders on all aspects of the deal, including purchaser identification, deal pricing, and structuring issues. KPMG Corporate Finance’s knowledge of the industry, strong relationships with strategic and financial buyers, and the ability to manage multi-party negotiations were fundamental to the consummation of the transaction.