By Dietrich Knauth
NEW YORK (Reuters) - Pharmacy chain Rite Aid (NYSE:US90274J5618=UBSS) Corp on Tuesday received bankruptcy court approval to sell its Elixir pharmacy benefit manager business for $575 million.
Rite Aid filed for bankruptcy in October with an agreement to sell the Elixir business to pharmacy benefit manager (PBM) MedImpact Healthcare Systems for that price.
The company continued to shop Elixir to more than 30 potential buyers during its bankruptcy, but no bidder offered a higher price than MedImpact's initial offer, Rite Aid attorney Ross Fiedler said on Tuesday at a bankruptcy court hearing in Trenton, New Jersey.
Fiedler said the Elixir sale is a critical part of Rite Aid's effort to raise money and re-focus on its retail pharmacy business in bankruptcy.
He told U.S. Bankruptcy Judge Michael Kaplan, who is overseeing the company's Chapter 11 proceedings, that the sale will likely close within the first quarter of 2024.
Kaplan approved the sale during the court hearing.
Rite Aid, one of the largest U.S. pharmacy retailers, cited its high debt, revenue declines, increased competition, and opioid litigation as factors that caused its bankruptcy.
Rite Aid closed 200 stores before its bankruptcy, and has continued to close more stores as its Chapter 11 case proceeds.
PBMs negotiate drug prices and rebates with drugmakers on behalf of employers, health plans and other clients.