The sale of CVS Health’s long-term care pharmacy business, Omnicare, isn’t expected “in the near term,” the company said Wednesday in a filing with the Securities and Exchange Commission.
The announcement, part of the company’s quarterly earnings report, was made to explain a decision in how the assets now are accounted for.
Omnicare serves senior living communities, skilled nursing facilities and Programs of All-Inclusive Care for the Elderly, or PACE.
“While the Company continues to evaluate strategic alternatives for the LTC business, during the third quarter of 2023, the Company determined it was no longer probable that a sale would be completed in the near term,” Woonsocket, RI-based CVS said.
For accounting purposes, the long-term care business no longer will be classified as an asset “held for sale.” Instead, the fair value of assets and liabilities associated with Cincinnati-based Omnicare now will appear on an unaudited condensed consolidated balance sheet, CVS said.
It was a year ago that CVS Health first publicly announced that it planned to sell Omnicare, deeming that it “was no longer a strategic asset.”
At the time, President and CEO Karen Lynch said that CVS planned to “make investments” related to its goal “to be in the home,” and acquisitions made since then have reflected that goal.
CVS reported a $2.5 billion loss related to the long-term care pharmacy business in the third quarter of 2022, and in the first quarter of 2023 it recorded a $349 million loss “to write-down the carrying value of the LTC business to the Company’s best estimate of the ultimate selling price which reflects its estimated fair value less costs to sell,” the company reiterated in the new SEC filing.
CVS acquired Omnicare in 2015 for $10.4 billion plus the assumption of $2.3 billion in Omnicare debt, according to published sources.
