TPG, AmerisourceBergen to acquire OneOncology in $2.1B transaction

TPG (TPG) and AmerisourceBergen (ABC) announced that they have agreed to acquire OneOncology, a network of oncology practices, from General Atlantic, a global growth equity firm. TPG has agreed to acquire a majority interest in OneOncology, and AmerisourceBergen will acquire a minority interest in the company. OneOncology’s affiliated practices, physicians, and management team will also retain a minority interest in the company. The transaction values OneOncology at $2.1B. TPG, AmerisourceBergen, and OneOncology’s affiliated practices, physicians, and management team will form a new joint venture that will acquire OneOncology from its existing shareholders, including current majority owner General Atlantic. AmerisourceBergen will purchase its minority interest in the joint venture for approximately $685M in cash, which will represent approximately 35% ownership in the joint venture. Beginning on the third anniversary of the closing of the joint venture’s acquisition of OneOncology and ending on the day before the fourth anniversary of that closing, TPG will have a put option under which TPG may require AmerisourceBergen to purchase all of the other interests in the joint venture, including TPG’s interest, at a price equal to 19 times OneOncology’s adjusted EBITDA for the most recently ended 12-month period prior to TPG’s exercise of the put option, all of which is subject to various other adjustments and qualifications. In addition, on the date that is the third anniversary of the closing and again beginning on the fourth anniversary of the closing and ending on the day before the fifth anniversary of the closing, AmerisourceBergen will have a call option to purchase all of the other interests in the joint venture, including TPG’s, also at the price set forth above subject to various other adjustments and qualifications. The transaction is expected to close by the end of September 2023 and is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals. Upon closing, the minority interest in OneOncology is expected to contribute a few cents to AmerisourceBergen’s adjusted diluted EPS in the first 12 months following closing. Following the closing of the transaction, AmerisourceBergen intends to account for its minority interest in OneOncology using the equity method of accounting, recording AmerisourceBergen’s future share of OneOncology’s net income or loss in Other Income, net.