Rhode Island-based pharmacy retail giant CVS Caremark Corporation (CVS) has signed a definitive agreement to purchase the assets of Navarro Discount Pharmacy in a strategic attempt to cater to the large Hispanic market in the U.S. Headquartered in Miami, this specialty pharmacy is the largest Hispanic-owned drugstore chain in the U.S.
Navarro's annual sales exceed $340 million on the back of a strong customer base in the Hispanic and ethnic markets. It is thus naturally expected that this deal will boost the prospects of CVS Caremark as a pharmacy innovation company within the fast-growing Hispanic market.
Post-acquisition, CVS Caremark will own Navarro's 33 retail drugstore locations and a specialty pharmacy titled Navarro Health Services that serves patients suffering from complex or chronic diseases. However, the acquired stores will continue to operate under the brand name of Navarro Discount Pharmacy.
The transaction is subject to customary closing conditions, which includes necessary regulatory approvals. The financial terms of the agreement, however, have been kept under wraps.
Both CVS Caremark and Navarro are bullish on this collaboration and expect to jointly improve patient outcome through high quality pharmacy-care products and services. Apart from traditional drug store services, Navarro has created a niche market through the sale of unconventional offerings like wireless phones and designer fragrances, along with a wide range of over-the-counter drugs and vitamins. On the back of this partnership, management at CVS Caremark hopes to gain a strong foothold in this evolving demographic marketplace.
Currently, CVS Caremark holds a Zacks Rank #2 (Buy). Some other notable medical stocks that warrant a look are Amsurg Corp. (AMSG), BioGen Idec Inc. (BIIB) and Curis, Inc. (CRIS). All these stocks sport a Zacks Rank #1 (Strong Buy).