Covington Associates Advises DrugMax, Inc. on Sale of Selected Assets
Boston, MA — January 3, 2006 — Covington Associates LLC announced today that it acted as the sell-side advisor to DrugMax, Inc. (NASDAQ: DMAX), a specialty pharmacy and drug distribution provider, in its sale of selected assets to Rochester Drug Cooperative (“Rochester Drug”).
DrugMax, based in Farmington, CT, has sold selected assets related to its wholesale pharmaceutical distribution business located in New Castle, Pennsylvania to Rochester Drug Cooperative. DrugMax works closely with doctors, patients, managed care providers, medical centers and employers to improve patient outcomes while delivering low cost and effective healthcare solutions. The asset sale will allow the company to exit the lower margin drug distribution business to concentrate on its pharmacy business and specialty pharmaceutical sales directly to physicians and related healthcare providers.
According to Ed Mercadante, R.Ph, Co-Chairman and Chief Executive Officer of DrugMax, “We believe that the sale of our non-core wholesale distribution business is a critical accomplishment. The sale of the business to Rochester Drug Cooperative ensures that customers will continue to receive a high level of service from an industry leader with a strong reputation developed over the past 100 years.”
Ben Dunn, a Managing Director at Covington Associates and lead advisor to DrugMax on the transaction, was quoted as saying “This transaction will allow DrugMax to focus on its core specialty pharmacy business and enable Rochester Drug to expand its presence across Western Pennsylvania and Ohio.”
About DrugMax, Inc.
DrugMax, Inc. operates 84 specialty pharmacies located at or near the point of medical care, including 7 franchised locations, in 13 states under the ArrowPharmacy & NutritionCenter and Familymeds Pharmacy brand names. The Company also operates Worksite Pharmacies(SM) located on-site at major employer groups as well as specialty pharmaceutical distribution directly to physicians and other healthcare providers. The DrugMax platform is designed to provide services for the treatment of acute and complex health diseases such as cancer, diabetes and pain management. The company often serves defined population groups on an exclusive closed panel basis to maintain costs and improve patient outcomes. To learn more about DrugMax, please visit www.drugmax.com.
About Covington Associates LLC
Covington Associates is a specialty investment banking firm founded in 1991 serving business service, consumer, industrial, healthcare and technology companies throughout the country. Focused on mergers and acquisitions, debt and equity capital raising, debt and equity restructuring, and strategic advisory assignments for middle market companies, Covington Associates has completed transactions ranging in value from $10 million to over $1 billion for both private and publicly traded companies. To learn more about Covington Associates, visit www.covingtonassociates.com.