Integrated buys pharmacy firm in bid to eliminate middlemen

June 22, 1993|By Patricia Meisol | Patricia Meisol,Staff Writer

Integrated Health Services Inc., said yesterday it has acquired a $12 million pharmacy operation in California in a bid to eliminate the middlemen supplying its nursing homes and improve profits.

Patient Care Pharmacy Inc. of Los Angeles is a privately held company that provides oral and intravenous preparations and medical equipment to long-term care providers. The acquisition involved an undisclosed amount of stock, said David N. Chichester, Integrated senior vice president for finance.

Entry into the pharmacy business allows the Hunt Valley-based company to supply its operations and expand into a new business. Patient Care will continue to market its products to third-party clients.

"We would expect it to grow to $40 million in total sales in the next few years," Mr. Chichester said. Integrated Health, which earned $9 million on revenues of $195 million last year, is growing at a rate of 25 percent annually.

Integrated Health owns, operates, or manages 66 long-term care facilities around the country. It pioneered medical specialty units, which are areas inside nursing homes equipped to care for patients who historically have been cared for in hospitals.

"We actually have been scanning the horizon, looking for an institutional pharmacy," Mr. Chichester said. "This fits nicely into our existing business. It's a vertical integration that will provide additional revenues from the existing Integrated Health client base."

The company plans to expand Patient Care into other states where Integrated has facilities gradually. Patient Care now has 120 contracts involving 80 California facilities, including at least one owned by Integrated.

The price of Integrated stock was unchanged yesterday. It closed at $26.375 a share.

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