Why Are Tabula Rasa HealthCare Shares Moving Higher Today?

Nautic Partners agreed to acquire Tabula Rasa HealthCare Inc TRHC for $10.50 in cash per share and combine with ExactCare Pharmacy, a portfolio company of Nautic. 

The all-cash transaction values Tabula Rasa at approximately $570 million including net debt of approximately $262 million on an enterprise value basis.

Following the closing of the transaction, John Figueroa, ExactCare's current Executive Chairman, will assume the role of Chairman and CEO of the combined company. The transaction is expected to close during Q4 of 2023.

The deal expands the reach of Tabula Rasa's MedWise technology platform to multiple provider and payer markets.

Tabula Rasa HealthCare reported Q2 adj EPS of $0.03, beating the consensus of $(0.14).

Adjusted net income from continuing operations reached $0.7 million, a turnaround from a loss of $(2.7) million.

The company reported sales of $90.04 million, beating the consensus of $88.82 million, representing organic growth of 24%.

William Blair analysts Jared Haase and Ryan Daniels say the deal reflects compelling shareholder value and provides a solid liquidity outcome after a challenging story over the past two years.

The analyst is also bullish on the strategic value of the combination. The two entities have a similar solution set, which should allow the companies to better leverage the scale of a combined organization to continue building a portfolio of pharmacy management solutions.

Combined with the all-cash deal structure and the alignment between Tabula Rasa’s board and its largest shareholder (Indaba), the analysts do not envision another bidder stepping in, hence downgrading the stock to Market Perform from Outperform.

Price Action: TRHC shares are up 30.8% at $10.25 on the last check Monday.