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CVS Caremark Corporation (CVS - Analyst Report) recently completed the $2.1 billion acquisition of drug infusion services provider Coram LLC. Coram which was owned by Apria Healthcare Group, a Blackstone Group (BX - Analyst Report) portfolio company, offers low-cost infusion services at the comfort of a patient’s home, which are otherwise administered either at hospitals or at physicians' offices at a much higher expense.

With the integration of Coram into the PBM business, CVS Caremark seeks to enhance its range of services to include infusion therapy, which mostly deals with administering medications and nutrition to patients who suffer from dehydration, have nutritional deficiencies, infections, diabetes or cancer, or have undergone renal failure. We note that the acquisition of Coram remains in line with CVS Caremark’s goal of investing in core and high-growth businesses.

CVS Caremark expects the acquisition to add $1.4 billion to revenues in the first year and 3 to 5 cents per share to its adjusted earnings per share in 2015. However, the transaction will have neutral impact on the company’s overall financial results in 2014.

Additionally, CVS Caremark will gain access to Coram’s extensive network, catering to around 20,000 patients. Coram is expected to strengthen its position in the specialty pharmaceutical business, a growth driver within the pharmacy benefit management (PBM) segment. In the recent reported quarter, the company disclosed that its PBM business registered growth of 28%, aided by the specialty pharmacy business.

The PBM business of CVS Caremark is part of the Pharmacy Services segment and offers a wide range of services comprising mail order pharmacy services, specialty pharmacy services, plan design and administration, formulary management and claims processing. Specialty pharmacies support individuals who require complex and expensive drug therapies. CVS Caremark, as a pharmacy benefit manager, administers prescription drug benefit programs for employers and health plans.

The foray into such specialized services by the second-largest PBM company is of great significance, as major pharma companies are planning to develop niche drugs for complex disorders. Such new services should also help manage overall cost of care delivery.

Currently, CVS Caremark carries a Zacks Rank #3 (Hold). Investors interested in the same industry may consider better-ranked stocks like Herbalife Ltd. (HLF - Snapshot Report) and Rite Aid Corp. (RAD - Analyst Report), both carrying a Zacks Rank #2 (Buy).

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