CHARLOTTE, N.C. - Premier Inc. (NASDAQ: PINC), a healthcare improvement company, has announced a new share repurchase program authorized by its Board of Directors, following a comprehensive review of strategic alternatives. The program includes a $1.0 billion share repurchase authorization and a $400 million accelerated share repurchase (ASR) transaction with Bank of America.
The share repurchases may take place intermittently through June 30, 2025, using various methods compliant with legal requirements. The ASR agreement stipulates an upfront payment of $400 million to Bank of America, with initial stock deliveries valued at approximately $320 million expected by Friday. The final settlement of the ASR transaction is anticipated to conclude in the first quarter of Premier's 2025 fiscal year.
Premier's management and the Board considered several capital deployment options, aiming to accelerate shareholder returns. Repurchases will be funded through cash reserves and available credit, without obligating the company to acquire a specific number of shares, and the program may be adjusted or terminated at any time.
The Board's approval follows the divestiture decision made in July 2023 to sell Premier's non-healthcare group purchasing organization (GPO) operations, focusing on healthcare businesses. Additionally, the company is seeking partners to potentially take over its interests in Contigo Health and S2S Global, subsidiaries specializing in optimizing employee health benefits and direct sourcing, respectively.
Richard J. Statuto, Chair of the Board, expressed confidence in Premier's business and operating strategy, emphasizing the company's strong foundation in supply chain expertise and AI-enabled technology platform. Michael J. Alkire, Premier's President and CEO, highlighted the relevance of Premier's solutions amidst industry challenges, such as the healthcare labor shortage and supply chain issues.
InvestingPro Insights
In light of Premier Inc.'s recent announcement regarding its share repurchase program, real-time data from InvestingPro offers additional context for investors considering the company's financial health and market position. Premier Inc. holds a market capitalization of approximately $2.51 billion, with a healthy P/E ratio of 14.13, suggesting a reasonable valuation relative to its earnings. Notably, the company's adjusted P/E ratio for the last twelve months as of Q1 2024 stands at an even more attractive 8.42.
InvestingPro Tips highlight that Premier Inc. not only holds more cash than debt, which is a strong indicator of financial stability, but also boasts a high shareholder yield. Additionally, the company has demonstrated a commitment to returning value to shareholders by raising its dividend for four consecutive years. The current dividend yield stands at 3.95%, which is quite competitive.
For those seeking further insights, there are additional InvestingPro Tips available for Premier Inc., providing a comprehensive analysis of the company's financial metrics and market performance. Subscribers to InvestingPro can access these tips, and with the special New Year sale, there's a discount of up to 50% on subscriptions. Use coupon code SFY24 for an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 for an additional 10% off a 1-year subscription to enhance your investment strategy with valuable data and expert insights.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.