WB ups Diplomat Pharmacy to market perform

Diplomat Pharmacy

William Blair upgraded Diplomat Pharmacy (NYSE:DPLO) to “market perform” from “underperform” after UnitedHealth Group’s (NYSE:UNH) OptumRx agreed to acquire Diplomat for $4 a share.

Shares of Diplomat were quoted at $3.96, down $1.84, or 32%, in early trading on Dec. 9.

“Given that [Diplomat] management has been assessing strategic alternatives for several months, we do not expect any additional competing bids for the company,” writes analyst John Kreger.

At the end of the third quarter of 2019, Diplomat had $553-million in net debt and 76 million shares outstanding. The agreement with OptumRx values Diplomat’s enterprise value at $856.5-million, Mr. Kreger said.