Medco Health Solutions — Merger or Acquisition (July 2011)
20 slides from Medco Health Solutions's merger presentation, Jul 22, 2011
Slide 1: Leading the Effort to Lower Drugs Costs for American Families
Leading the Effort to Lower Drugs Costs for American Families
Slide 2: Presenters
Presenters George Paz Express Scripts, Inc. Chairman & Chief Executive OfficerDavid Snow Medco Health Solutions, Inc. Chairman & Chief Executive OfficerJeff Hall Express Scripts, Inc. Executive Vice President & Chief Financial Officer
Slide 3: Agenda
Agenda Benefits of MergerTransaction Overview & Financial ConsiderationQ&A
Slide 4: A combination the nation needs now: lowers healthcare costs while improving patient care
+ A combination the nation needs now: Lowers healthcare costs while improving patient care
Slide 5: Benefits of the Combination
Benefits of the Combination Addresses national mandate for more affordable, higher quality healthcareProvides leadership and resources required to drive out waste and improve health outcomesAccelerates efforts to create greater efficiencies in healthcare Builds on our legacy of advancing healthcare
Slide 6: Clients and Members Will Benefit
Clients and Members Will Benefit Invite collaboration across the healthcare continuum to drive innovation Accelerates research, development and deployment of trend management tools Close gaps in care and achieve greater adherence through behavioral approach and clinical strengths Utilize expertise t
Slide 7: The Right Transaction for Medco
The Right Transaction for Medco Enhances Medco's successful track record of performance22% EPS CAGR since spin-off in 2003 Built world-class specialty businessImplemented numerous innovations (Therapeutic Resource Centers, DNA Direct, Medco Research Institute)Executed diversification strategy (UBC a
Slide 8: Combining Complementary Expertise via Consumerology and Clinical Innovation
Combining Complementary Expertise Via Consumerology(r) and Clinical Innovation Clinical and data integrationSpecialty benefit services Care Coordination More than moneyOne size does not fit allKey psychological forces Behavioral Insights TRCs driving increased adherence and compliance Specialist Pha
Slide 9: Building Shareholder Value Through Alignment
Building Shareholder Value Through Alignment Complements Core Competencies Diversifies Business Enhances Specialty Pharmacy Platform Adds Additional Mail Order Capabilities Significant Synergy Potential + Improving health outcomes; delivering shareholder value Driving out waste Lowering costs
Slide 10: History of building shareholder value through successful acquisition strategy
History of building shareholder value through successful acquisition strategy Note: Represents Adjusted EBITDA from continuing operations which is reconciled in tables in our earnings releases; adjusted to exclude non-recurring items. Track Record of Execution and Innovation Commitment to Building S
Slide 11: Creating significant value through organic growth and strategic combinations
Creating significant value:Successful track record of creating shareholder value through organic growth and strategic combinations +
Slide 12: Transaction Overview
$28.80 cash and 0.81 of a share of Express Scripts stock (fixed exchange ratio); total consideration of $29.1 billionTotal value of $71.36 per Medco share based on Express Scripts' closing stock price on July 20, 2011 Transaction Overview Price Premium Ownership Anticipated Closing First half of 201
Slide 13: Significant Financial Benefits
Significant Financial Benefits Slightly accretive in first full year; moderately accretive post integration$1 billion of synergies when fully integratedMaintains Express Scripts' Strong Financial ProfileCash Flow: $4 billion+ of annual free cash flow post integrationCapex: Disciplined capex deployme
Slide 14: Proven success integrating acquisitions and reducing leverage rapidly
Proven success integrating strategic acquisitions and reducing leverage rapidly $1,268m $460m $715m $466m $333m $251m NextRx$4,675m Note: Represents Adjusted EBITDA from continuing operations which is reconciled in tables in our earnings releases; adjusted to exclude non-recurring items. Track Recor
Slide 15: Regulatory Approval
Regulatory Approval Significant benefits in the public interestLowers costs and improves outcomes for clients and membersImproves the overall quality of healthcare by ensuring proper compliance, avoiding adverse reactions and providing customers the feedback to live healthier livesFacilitates cooper
Slide 16: Roadmap to Completion
Roadmap to Completion Complete required filingsSpecial meetings for Express Scripts and Medco shareholder approvalReceive regulatory approvalsHart-Scott-RodinoTransaction expected to be completed in the first half of 2012
Slide 17: Forward Looking Statements
FORWARD LOOKING STATEMENTSCautionary Note Regarding Forward-Looking StatementsThis materialmay include forward-looking statements, both with respect to us and our industry, that reflect our current views with respect to future events and financial performance. Statements that include the words "expe
Slide 18: Forward Looking Statements (Continued)
FORWARD LOOKING STATEMENTS (Continued)TRANSACTION-RELATED FACTORS Uncertainty as to whether Express Scripts, Inc. (Express Scripts) will be able to consummate the transaction with Medco Health Solutions, Inc. (Medco) on the terms set forth in the merger agreement;The ability to obtain governmental a
Slide 19: Additional Information and Where to Find It
ADDITIONAL INFORMATION AND WHERE TO FIND IT This communication is not a solicitation of a proxy from any stockholder of Express Scripts, Medco or Aristotle Holding, Inc. In connection with the Agreement and Plan of Merger among Medco, Express Scripts, Aristotle Holding, Inc., Plato Merger Sub Inc. a
Slide 20: Leading the Effort to Lower Drugs Costs for American Families
Leading the Effort to Lower Drugs Costs for American Families
Medco Health Solutions — Merger or Acquisition (July 2011) on 6ix