Healthcare Purchasing Network Premier Launches $1B Share Buyback Program, Concludes Strategic Review Process After Q2 Performance

On Monday, Premier Inc PINC announced it had concluded its exploration of strategic alternatives, and the board has approved a new $1.0 billion share repurchase authorization.

Repurchases may occur from time to time through June 30, 2025. Under the share repurchase authorization, the company has entered into an accelerated share repurchase agreement with Bank of America to repurchase an aggregate of $400 million.

As part of its review process, the company seeks partners for some or all of Premier’s holdings in Contigo Health, a subsidiary focused on providing comprehensive services that optimize employee health benefits, and S2S Global, a direct sourcing subsidiary.

“After a thorough review of alternatives, we are excited to move forward with a more focused strategy predicated on automating and streamlining all aspects of the supply chain and leveraging our unique data, technologies, and AI capabilities to support provider performance improvement and growth in certain adjacent markets,” said Michael J. Alkire, Premier’s President and CEO. 

Earnings: Premier reported second quarter 2024 adjusted EPS of $0.60, down 14% Y/Y, beating the consensus of $0.57

The company reported sales of $334.75 million, down 7% Y/Y, better than the consensus estimate of $341.50.

Revenues declined from the prior year primarily due to a challenging revenue comparison for enterprise license agreements in the Performance Services segment, the impact of higher aggregate member fee share in the group purchasing business, and continued market conditions in the direct sourcing business.

Guidance: Premier expects fiscal year 2024 adjusted EPS of $2.06-$2.18 compared to the consensus of $2.16.

The company sees 2024 revenue of $1.265 billion-$1.325 billion compared to the consensus of $1.33 billion.

The guidance includes Supply Chain Services revenues of $840 million-$880 million and Performance Services segment sales of $425 million-$445 million.

Price Action: PINC shares are up 6.32% at $22.28 on the last check Tuesday.

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