Walgreen to acquire BioScript's community specialty pharmacies, centralized specialty and mail service business in deal worth US$225M

DEERFIELD, Illinois , February 2, 2012 () – Walgreen Co. (NYSE: WAG) (NASDAQ: WAG) and BioScrip, Inc. (NASDAQ: BIOS), a national provider of pharmacy and home health services, today announced that they have entered into a definitive agreement under which Walgreens would acquire certain assets of BioScrip's community specialty pharmacies and centralized specialty and mail service pharmacy businesses and BioScrip would receive a total deal value of approximately $225 million. This includes approximately $170 million in cash at closing and retention by BioScrip of associated accounts receivable and working capital liabilities of approximately $55 million, based on BioScrip's balance sheet values at Dec. 31, 2011. Up to an additional $60 million in purchase price may be payable based on events related directly or indirectly to Walgreens retention of certain business included in the transferred businesses.

This acquisition fits Walgreens strategy to advance community pharmacy and bring additional specialty pharmacy products and services closer to patients. The acquisition will also help grow Walgreens centralized specialty and mail service pharmacy operations.

For BioScrip, the transaction will provide the ability to continue to focus on and expand in its core strategic growth areas--infusion pharmacy and home health services. BioScrip will also maintain its pharmacy benefit management and cash card business.

"Together, BioScrip's clinically focused community specialty pharmacies and access to additional limited distribution drug therapies, and Walgreens existing nationwide network of retail and health system pharmacies create a strong network of support for our core drugstore business to provide specialty pharmacy solutions to our patients," said Walgreens President and CEO Greg Wasson. "Many of our patients will benefit from expanded access to new and limited distribution drugs for chronic conditions such as HIV, cancer and organ transplant. This acquisition also significantly expands our nationwide reach to an additional half-million patients with chronic and complex health conditions who have strong clinical relationships with their current BioScrip pharmacy."

BioScrip President and CEO Rick Smith stated, "Our specialty pharmacy clinicians have established a respected reputation for high levels of customer service. The recognition of our clinical expertise in complex, chronic programs has resulted in consistent growth of this business. We believe that Walgreens is an ideal home for BioScrip's specialty pharmacy and mail businesses, as it has the resources to support a growing customer base."

BioScrip's community specialty pharmacy business is a national network with 30 locations in 16 states across the U.S. and the District of Columbia, primarily serving HIV, oncology and transplant patients. In addition to acquiring those locations, Walgreens will acquire certain assets of BioScrip's centralized specialty pharmacy business and traditional mail service pharmacy business that dispenses prescriptions for, among others, drugstore.com, which was acquired by Walgreens in June 2011.

The transaction is structured as an asset acquisition, with a plan to transfer the servicing of patients for the central specialty pharmacy and mail service pharmacy businesses to existing Walgreens facilities. BioScrip will continue to service its infusion patient base through existing BioScrip pharmacy facilities.

Walgreens currently anticipates the transaction will not have a material impact on its earnings per share in fiscal year 2012, and expects it to be modestly accretive in fiscal year 2013.

Completion of the transaction is subject to customary conditions, including satisfaction of regulatory requirements and other closing conditions. Walgreens plans to fund the acquisition with existing cash and anticipates the transaction will close by late April 2012. The transaction was unanimously approved by both companies' boards of directors.

Peter J. Solomon Company, L.P. acted as financial advisor to Walgreens in the transaction, and the law firms of SNR Denton and Weil, Gotshal and Manges LLP served as legal counsel for Walgreens. MTS Health Partners, L.P. acted as financial advisors to BioScrip. The law firm of King & Spalding, LLP served as legal counsel to BioScrip.

About Walgreens

Walgreens (www.walgreens.com) is the nation's largest drugstore chain with fiscal year 2011 sales of $72 billion. The company operates 7,818 drugstores in all 50 states, the District of Columbia and Puerto Rico. Each day, Walgreens provides nearly 6 million customers the most convenient, multi-channel access to consumer goods and services and trusted, cost-effective pharmacy, health and wellness services and advice in communities across America. Walgreens scope of pharmacy services includes retail, specialty, infusion, medical facility and mail service, along with respiratory services. These services improve health outcomes and lower costs for payers including employers, managed care organizations, health systems, pharmacy benefit managers and the public sector. Take Care Health Systems is a Walgreens subsidiary that is the largest and most comprehensive manager of worksite health and wellness centers and in-store convenient care clinics, with more than 700 locations throughout the country.

About BioScrip, Inc.

BioScrip, Inc. (www.bioscrip.com) is a national provider of pharmacy and home health services that partners with patients, physicians, hospitals, healthcare payors and pharmaceutical manufacturers to provide clinical management solutions and delivery of cost-effective access to prescription medications and home health services. Our services are designed to improve clinical outcomes to patients with chronic and acute healthcare conditions while controlling overall healthcare costs.

Cautionary Note Regarding Forward-looking Statements: Statements in this press release that are not historical are forward-looking statements. Words such as "expect," "likely," "outlook," "forecast," "would," "could," "should," "can," "will," "project," "intend," "plan," "continue," "sustain," "on track," "believe," "seek," "estimate," "anticipate," "may," "possible," "assume," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that could cause actual results to vary materially from those indicated, including: the ability to satisfy the closing conditions and consummate the proposed transactions on a timely basis or at all, the ability to successfully integrate the acquired business, the ability to realize anticipated synergies, the ability to achieve anticipated financial results and other factors described in Walgreens Annual Report on Form 10-K for the year ended August 31, 2011, BioScrip Annual Report on Form 10-K for the year ended December 31, 2010 and their respective subsequent SEC filings, which risks and uncertainties are incorporated herein by reference. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except to the extent required by law, Walgreens and BioScrip disclaim any obligation to update any forward-looking statements after the distribution of this press release, whether as a result of new information, future events, changes in assumptions, or otherwise.

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