Houlihan Lokey Advises LDI Integrated Pharmacy Services

Houlihan Lokey is pleased to announce that Leehar Distributors, LLC, doing business as LDI Integrated Pharmacy Services, a portfolio company of Nautic Partners, LLC, and Oak HC/FT Partners, L.P., has been acquired by Diplomat Pharmacy, Inc., (NYSE:DPLO). The transaction closed on December 20, 2017.

The acquisition of LDI Integrated Pharmacy Services (LDI) positions Diplomat Pharmacy (Diplomat) to take a strategic leap forward, becoming a highly differentiated specialty company and giving healthcare payors access to a robust specialty platform to manage this high-cost, fast-growing component of pharmacy benefits.

Under the terms of the agreement, Diplomat paid LDI $515 million in cash and approximately $80 million in Diplomat common stock. LDI is expected to generate approximately $388 million in revenue and $41 million in adjusted EBITDA in 2017.

Based in Creve Coeur, Missouri, LDI was founded by pharmacists in 1967 and is a trusted partner for pharmacy benefit management (PBM). The company is a national PBM focused on the middle market and serves hundreds of payor clients, including health insurers, third-party administrators, and self-insured organizations. LDI offers specialty and mail-order pharmacy dispensing, an extensive retail network, and comprehensive clinical programs to help plan members achieve their treatment goals.

Nautic Partners (Nautic) is a middle-market private equity firm that focuses on three industries: healthcare, industrial products, and outsourced services. Nautic has completed 131 platform transactions over its 31-year history. The firm’s strategy is to partner with management teams to accelerate the growth trajectory of its portfolio companies via add-on acquisitions, targeted operating initiatives, and increased management team depth. Nautic generally makes equity investments of $25 million to $100 million.

Oak HC/FT Partners is the premier venture growth-equity fund investing in healthcare information and services (HC) and financial services technology (FT). The firm is focused on driving transformation in these industries by providing entrepreneurs and companies with strategic counsel, board-level participation, business plan execution, and access to its extensive network of industry leaders.

Diplomat is the nation’s largest independent provider of specialty pharmacy services—helping patients and providers in all 50 states. The company offers medication management programs for people with complex chronic diseases and delivers unique solutions for manufacturers, hospitals, payors, providers, and more. Founded in 1975 as a neighborhood pharmacy, Diplomat is focused on improving patient care and clinical adherence.

This transaction further strengthens Houlihan Lokey’s position in the pharmacy services sector, becoming its fourth closed M&A transaction in this space over the past two years. Houlihan Lokey's Healthcare Group is among the largest dedicated healthcare investment banking groups in the country. In 2016, the group closed 41 transactions and was ranked the No. 1 advisor for all U.S. healthcare M&A transactions by Thomson Reuters. Houlihan Lokey's Healthcare Group has closed more than 300 M&A healthcare transactions since inception.

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