Five Star to sell pharmacy business for $30.7M

NEWTON, Mass. (AP) -- Five Star Quality Care Inc. said Monday that it reached a deal to sell its pharmacy business to pharmaceutical services provider Omnicare Inc. for $30.7 million.

The Newton, Mass.-based nursing home and assisted-living facility operator said it expects the sale to result in a capital gain of about $23.5 million. The news sent Five Star shares up 7 percent in afternoon trading.

The business includes eight licensed pharmacies operating in 13 states that provide institutional pharmacy services to 247 senior living communities with about 12,300 units, Five Star said.

In addition to the $30.7 million in proceeds, Five Star will sell to Omnicare, or retain, working capital invested in the pharmacy business equal to about $9.4 million, the company said. The company therefore expects its net cash receipts from the sale to be about $39.9 million.

Five Star said the sale, which is subject to customary closing conditions, is expected to close by the end of the year.

Five Star shares rose 33 cents, or 10.1 percent, to $3.59 in afternoon trading, after peaking at $3.54 earlier in the day.

Over the past 52 weeks, the company's shares have traded between $2.15 and $6.15.

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Five Star to sell pharmacy business for $30.7M