U.S. Markets closed

Bioscrip Inc (BIOS) Q4 2018 Earnings Conference Call Transcript

Motley Fool Transcribers, The Motley Fool
Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Bioscrip Inc  (NASDAQ: BIOS)
Q4 2018 Earnings Conference Call
March 15, 2019, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings and welcome to the Bioscrip and Option Care Merger Transaction call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the call over to Kathryn Stalmack, Senior Vice President and General Counsel for Bioscrip. Please go ahead.

Kathryn M. Stalmack -- Senior Vice President and General Counsel

Good morning, and thank you for joining us today. Earlier this morning, Bioscrip jointly announced a definitive merger agreement with Option Care, and announced the Company's fourth quarter and full year 2018 financial results.

Copies of both press releases along with an investor presentation summering highlights of the definitive merger agreement with Option Care can be found in the Investor Relations section of our website at www.bioscrip.com.

Within two hours of this call's completion, an audio replay will also be available in the Investor Relations section of Bioscrip's website. Please note that today's presentation is neither an offering of securities nor solicitation of a proxy vote. The information discussed today is qualified in its entirety by the registration statement and joint proxy statement, that Bioscrip and Option Care will be filing with the SEC in the future.

Before I get started, I'd like to remind everyone that our comments may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such forward-looking statements are based on current expectations, and there could be no assurance that the results contemplated in these statements will be realized.

Please refer to our press releases, our reports filed with the SEC, where you will find factors that could cause actual results to differ materially from these forward-looking statements. These forward-looking statements are based upon information available to Bioscrip today and the Company assumes no obligation to update statements as circumstances change.

During this presentation, we will refer to adjusted EBITDA, a non-GAAP financial measure. Reconciliation to the most comparable GAAP-financial measure is contained in our press release issued this morning.

Now with me here today, President and chief executive officer, Dan Greenleaf of Bioscrip, who will begin the call with opening remarks about the transaction announced this morning. And then Steve Deitsch, Senior Vice President, Chief Financial Officer and Treasurer of Bioscrip, will provide a brief recap of Bioscrip's fourth quarter and full year financial results.

Then John Rademacher, Chief Executive Officer of Option Care and Mike Shapiro, Chief Financial Officer of Option Care will provide their remarks on the transaction, and we will leave enough time for Q&A.

All four members of the management will be available to answer your questions. And now I'd like to turn the call over to Dan Greenleaf. Dan?

Daniel E. Greenleaf -- President & Chief Executive Officer

Yeah. Hey, thanks, Kathryn, and good morning, everyone and thank you for joining us. I want to draw your attention to slide four. Clearly, it is a very exciting day for all of us. We are absolutely thrilled to have entered into definitive merger agreement with Option Care. This historic transaction will transform each of our respective companies in the entire home infusion industry through their creation of a leading independent provider of home and alternate site infusion services.

Our companies have complementary footprints and the combination creates a well diversified organization with national reach, including approximately 150 locations in 46 states. It also expands our therapies and preferred partnerships with payers, hospital systems, drug and drug manufacturers, allowing us to better serve our patients.

We operate in a highly fragmented market and this transaction gives the combined Company, the capability to serve more patients with cost effective care throughout the US. The highly complementary nature of our respective portfolios will enable the delivery of high quality, cost effective solutions to providers across the country and will position us to provide superior outcomes for patients, payers and providers.

I see a great cultural fit between our two organizations, highlighted by our common emphasis on clinical expertise and successful patient outcomes. Together, we will have more than 2,900 skilled clinicians in a footprint that covers 96% of the US population.

By merging with Option Care, we have the potential to drive significant value for Bioscrip shareholders, through a combined operating model and the realization of clearly identified synergies, along with the refinancing of Bioscrip's complicated capital structure.

Among the key financial takeaways, the combined Company is projected to deliver 2018 pro forma annual revenue of more than $2.6 billion, annual run rate cost synergies of at least $60 million within two years. Pro forma adjusted 2018 EBITDA exceeding $200 million, including synergies, a pro forma debt to EBITDA leverage ratio of approximately 6 times, providing greater flexibility for the Company to grow.

With a simplified capital structure, multiple growth opportunities and achievable run rate cost synergies, the combined Company should be able to deliver -- delever, excuse me, while pursuing a balanced capital allocation strategy, which will include market making the appropriate investments to achieve sustainable growth and shareholder value appreciation.

As one of the largest providers of home and alternate site infusion solutions in the United States, the combined Companies will be a pure play of scale. We believe it will offer investors a compelling way to participate in the attractive and growing home and alternate site infusion market.

Option Care's CEO John Rademacher will become the CEO of the combined Companies, and Option Care's, Chief Financial Officer, Mike Shapiro will become the CFO of the combined Companies.

John and Mike are accomplished healthcare professionals with significant healthcare leadership experience. I will be staying with the Company as an advisor to combined Companies' Board of Directors.

John has held various executive level positions at leading public healthcare companies, including Cardinal Health, where he served as President and General Manager for both the ambulatory care division and the nuclear and pharmacy services division. And at Cigna Corporation, where he served as President of CareAllies and Chief Operating Officer for the CIGNA Behavioral Health business.

Mike served as a Senior Vice President and Chief Financial Officer for Catamaran Corporation. A publicly traded pharmacy benefits manager and led a successful process through which the company was sold to United Healthcare Group. He also had

a long-standing career with Baxter International, holding several financial positions across several business and corporate functions. Having to got to know John and Mike better, the last several months, I'm highly confident that in working with them together, we will take the combined Company to the next level.

In short this is a great fit. We are joining two strong high-performing companies with track records of growth and success. From this position of strength, the two companies coming together are positioned to grow at even a greater rate.

I am now pleased to turn the floor over to Steve Deitsch, Chief Financial Officer, who will provide an overview of our fourth quarter and full year 2018 results. Steve?

Steve Deitsch -- Senior Vice President Chief Financial Officer & Treasurer

Thank you, Dan, and good morning, everyone. I am also very excited about this transformative and historic transaction we announced with Option Care this morning. Before we discuss the transaction further, I will provide a brief overview of BioScrip's fourth quarter and full year 2018 financial results, which were released this morning.

Fourth quarter net revenue grew 7.8% on a comparable basis to the fourth quarter of 2017. During the fourth quarter of 2018, the Company recorded a bad debt adjustment of $7.5 million based upon trends in cash collections. The bad debt adjustment reduced net revenue and adjusted EBITDA by $7.5 million.

Adjusted EBITDA was $11.6 million or $19.2 million before the bad debt adjustment compared to $17.1 million in the prior year quarter, an approximate 12% increase.

Cash and cash equivalents were $14.5 million at December 31st, 2018. Adjusted EBITDA for the full year was $45.1 million or $52.6 million before the bad debt adjustment compared to $45 million in the prior year, a 16.8% increase. This amount was slightly below the low end of our full-year EBITDA guidance, due to slower than anticipated revenue growth in December.

However, we commenced 2019 on a very strong note with gross revenue growth accelerating to 9% in both January and February, and March gross revenue to date trending at similar levels. The first quarter of 2019 will mark the third consecutive quarter of organic revenue growth achieved by BioScrip.

Finally, given the combination announced today with Option Care, the Company will not be providing updated 2019 BioScrip financial guidance.

I'll now turn the call over to John Rademacher to give you some visibility into the Option Care business. John?

John C. Rademacher -- Chief Executive Officer

Good morning, everyone, and thanks for joining us today. I'm happy to be here with you to tell you about -- more about the incredible opportunity we see through the combination of BioScrip and Option Care. And thank you Dan and Steve. I've enjoyed getting to know both of you and I look forward to working with you as we move toward closing an integration.

I want to underscore how excited I am to be bringing together two strong mission-driven companies to create a leading independent provider of home and alternate site infusion services with national reach, comprehensive therapy offering, continued independent and financial capacity and flexibility to succeed and capitalize on growth opportunities.

Taking a step back, Option Care formally Walgreens Infusion Services has been an independent infusion services company, since it was separated from Walgreens Boots Alliance in 2015 in a joint investment partnership between Madison Dearborn Partners, a leading private-equity firm based in Chicago and Walgreens Boots Alliance, Inc.

Option Care has nearly -- has a nearly 40-year history of shaping the home infusion services industry, and during our time under private ownership, we have transformed the company, benefiting from the agility of being an independent company with additional investment and access to the expertise, capabilities and resources of Madison Dearborn and a continued collaboration with Walgreens.

We have enhanced capabilities, a network of over 70 pharmacies and over 90 alternate treatment sites across the country. Over 750 payer relationships including contracts with all 10 of the top 10 national payers, and we are a contracted provider of Medicare and Medicaid in all 50 states.

Option Care is built on a culture that connects our clinical expertise and company's success to patient outcomes. We are proud to have skilled clinicians, highly trained in their field, who are focused on providing the best in patient care and who served over 131,000 unique patients in 2018.

As I touched on previously, BioScrip and Option Care, both offer top therapeutic solutions. But Option Care also brings the number of limited distribution drugs and some of those are exclusive to Option Care. And also like BioScrip, we are focused on innovation with a reputation for high quality and patient-centered -- centric care, which brings me to slide six.

As a team, we have worked to drive operational efficiency throughout the business. From improving our industrial strength and infrastructure, industry-leading quality management system and deep partnerships with health systems and referral sources. And this has resulted in recognition for Option Care of consistently improving the delivery of service to patients, payers and manufacturers.

We put patient care at the center of everything we do. And that is borne out by our high overall patients satisfaction rate, minimal rate of adverse drug reactions and line infections, and the substantial average cost savings our services provide, that enable patients to avoid expensive and inconvenient hospital sets.

In fact Option Care is the only home and alternate site infusion services provider with all four industry accreditations. The satisfaction of our patients is at the center of everything we do and that will remain the case going forward once Option Care and BioScrip combine.

As this transaction brings together two organizations and thousands of employees dedicated creating a best-in-class experience for our patients and their family, patients will benefit from the combined Companies' personalized compassionate approach to care. And together, we will continue focusing on providing the highest quality care in the home infusion industry.

This transformative transaction also offer compelling opportunity to invest side by side with world-class shareholders, who have established track records of driving long-term sustainable value in healthcare.

Madison Dearborn has successfully investing in growing healthcare companies for over 30 years. Some of the firms notable healthcare investments, include Sage products, Sirona Dental Systems now Dentsply Sirona, Team Health, and VWR International. And we have long benefited from the supportive partnership from Walgreens, first, as part of the company and since our independence in 2015, they continue to be a great partner as a major shareholder alongside Madison Dearborn.

We expect to continue benefiting from Madison Dearborn and Walgreens deep healthcare relationships, additional resources and sector expertise. This should enhance our ability to explore expanded capabilities and services and deliver high quality infusion therapy to more patients across the United States.

Moving to slide eight. I now -- I will now spend time going into greater depth describing the numerous benefits of the strategic combination. Importantly, we believe it provides BioScrip shareholders with the opportunity to participate in upside we see resulting from this combination. This upside will be driven by a number of factors. We have an expanded national geographic

presence and I want to point out that while we will be a leader in the market, it will continue to be a highly fragmented marketplace. Together, we have an independent at (ph) scale clinical platform to capitalize on the ongoing shift of healthcare and infusion services to lower cost, safer patient preferred of the home or an alternate site.

I also want to emphasize that as an independent provider, we will retain the unique ability to deliver high quality infusion therapy to every commercial and governmental payer. We are not reliant on PBM, and while -- and we will have Medicare and Medicaid exposure, the combined Company will experienced minimal pen stroke risk. In fact, we estimate that over three quarters of the combined Company payers will be commercial payers.

Additionally, we have enhanced payer diversity with the top 10 payers, all in network and a strength -- and strengthened and expanded combined product portfolio, plus the capability to create additional growth through new product and service introductions due to an enhanced scale. We also expect the transaction to provide achievable cost synergies, including meaningful operating and supply chain efficiencies. And our enhanced financial profile will further enable the combined Company to pursue a balanced capital allocation strategy, including investing in our people and services to drive growth and capitalize on favorable market trends, while also prudently managing the Combined Companies' debt profile.

Finally, we are bringing together the best of both businesses, including an experienced leadership team and Board of Directors that will draw from the talents -- from both Option Care and BioScrip.

If you turn to slide nine, you can see the combined Company will be a leading independent provider of home and alternate site infusion services. As Dan mentioned, with more than $2.6 billion in combined 2018 pro forma revenue, our collective national reach will include the largest and most skilled group of more than 2900 clinicians, including pharmacist, pharmacy technicians, nurses and dietitians.

I will let Dan talk about the combined Companies' expanded reach.

Daniel E. Greenleaf -- President & Chief Executive Officer

Thanks, John. So, I think some of you've heard me talk about our desire to expand West of the Mississippi River, I think a number of you on the phone over the years of have heard my descriptions of Louisiana Purchase in Oregon Terry -- Territory as I like to joke, and I look at this, and this really accomplishes that. And I think it's one of the things that among the other opportunities we have here I'm most excited about. And one of the great aspects of this transaction is it -- that it provides us with a truly national platform. Our expanded reach will cover 96% of the US population with facilities in 46 states and the ability to spend (ph) and serve patients in all 50 states. Indeed, our combined employee base, we utilize clinical monitoring and reporting to develop personalized care plans for patients, and we'll be able to provide ongoing quality care in support of complex therapy regimens.

I can't emphasize enough the value of a best-in-class platform that is of national scope. Due to our scale, we will be positioned as the partner of choice for pharmaceutical manufacturers seeking innovative distribution channels and patient support models to access the market. And in areas we are both present, we intend to leverage our combined expertise to ensure we're able to raise the bar higher, because together, we will have the resources to successfully and effectively handle the increased volume.

I'll now -- I'll now walk through the terms of the transaction and how we're creating value for BioScrip shareholders. BioScrip will issue new shares to Option Care's shareholders, which is owned by investment funds affiliated with Madison Dearborn Partners and Walgreens in an all-stock transaction. Upon completion of the transaction, the Madison Dearborn funds and Walgreens will beneficially own approximately 80% of the combined Companies on a fully diluted basis with BioScrip shareholders holding the remainder.

Our common stock will continue to be listed on the NASDAQ Global Market. An important element of this transaction is the fact that the Company will be run by a management team that draws on the best talent from both BioScrip and Option Care. As I mentioned earlier, John will serve as the CEO of the combined Company and Mike Shapiro, will be the CFO, I will remain active as a Special Advisor to the Board.

The combined Companies' Board will have 10 members, made up of eight directors from Option Care and two from BioScrip's Board. BioScrip's current Chairman, Carter Pate will serve as a Director of the combined Companies, as well Dave Golding from the BioScrip Board. The combined Companies' Board is expected to benefit from the addition of the industry leaders such as Harry Kraemer, John Arlotta and Nitin Sahney.

We look forward to introducing you to additional members of the combined Companies' Board and the leadership team as we approach closing, which we expect in the second half of 2019.

There is also committed financing in place to refinance and help optimize and simplify the combined Companies' capital structure and the leadership will focus on pursuing a balanced capital allocation strategy that will enable the combined Company to invest in its people and services and to drive organic growth, while paying down debt.

Pro forma combined net leverage ratio is expected to be approximately 6 times, which is -- which compares favorably to BioScrip's stand-alone net leverage of approximately 11 times and inclusive of BioScrip's preferred equity 13 times as of year-end 2018.

The transaction has been unanimously approved by the Boards of Directors of both Bioscrip and Option Care and is subject to the satisfaction of customary closing conditions, including regulatory approvals and BioScrip shareholder approval.

Looking at slide 11, let me now underscore the substantial value creation potential of this combination that would result intangible benefits to shareholders. We are creating a leading independent provider of home and alternate treatment site infusion therapy services. Bioscrip's shareholders will have the opportunity to participate in the long-term potential of a diversified business across payers, therapies and geographies in which no existing payer of the combined Company will account for more than 11% of the net revenue across a broad therapy portfolio.

Bioscrip's shareholders will also benefit from substantial synergies including over $60 million in run rate cost synergies forecasted within 24 months of the transaction closing. And as you think about capturing deal synergies and accelerating growth, both Madison Dearborn and Walgreens have a successful track record of driving long-term sustainable value in healthcare. The transaction provides what we believe is the compelling opportunity to invest alongside the seasoned investors in a Company with enhanced scale, a simplified and enhanced capital structure and a highly experienced management team and Board of Directors.

Furthermore, the combined Companies' capital structure will result in enhanced cash flow profile and a financial capacity to pay down debt and invest in growth opportunities, while enhanced scale will drive opportunity to capture scale efficiencies and create additional vectors of growth through new product and service introductions.

Now John will walk us through the favorable dynamics of our industry and how that provides great opportunity for the combined Companies.

John C. Rademacher -- Chief Executive Officer

Thanks, Dan. Let me give you a sense of the significant growth opportunity in front of us. We are not only operating in a large and growing industry, but we have many tailwinds operating in our payouts favor. The US infusion industry is approximately about $100 billion, and of that home and alternate site infusion currently account for approximately $12 billion. The combined Company will be a leader in this highly fragmented industry, which is estimated to grow approximately 5% to 7% per year.

Together, we will be one of the largest providers of home and alternate site infusion solutions, and we are -- we are both built on -- upon a commitment to provide value-based care, which is driving home infusion share growth. Value-based care not only improves clinical outcomes and lower overall costs, but it also deliver better results for payers and providers. With unparalleled breadth and depth, we will be uniquely positioned to capitalize on growth opportunities.

We intend to pursue multiple avenues of growth, including organic growth in chronic and acute therapies, along with generating growth through operational efficiencies, improved performance in revenue cycle management and innovative new therapy introduction.

Our ability to grow should be enhanced by the fact that the combined Company will continue to be an independent provider, not tied into any single payer.

Turning now to synergies, we expect to generate over $60 million in run rate cost synergy savings. Through meaningful operating and supply chain efficiencies, including driving procurement efficiencies, maximizing local coverage, while increasing access to care and optimizing administrative functions across the national network.

We will be leveraging the significant talent and assets of the combined teams and I look forward to capitalizing on the many growth opportunities this combination creates. And as I mentioned earlier, we expect the cost synergies to be realized within 24 months of closing.

I will now let Mike Shapiro discuss the transaction's financial benefits.

Mike Shapiro -- Chief Financial Officer

Thanks, John, and good morning, everyone. Turning to slide 14. I'd like to share a few thoughts regarding the pro forma combined enterprise. The transaction creates an organization with combined 2018 pro forma revenues of more than $2.6 billion and combined 2018 pro forma adjusted EBITDA more than $200 million, inclusive of $60 million in run rate synergies John just outlined. Given the revenue and earnings growth potential, we believe the opportunity to create value for shareholders is significant, and given the broader reach and synergy capture opportunity, we would expect earnings growth to outpace above market revenue growth.

And as Steve will cover in a minute, we also expect to generate strong cash flow as a result of the earnings expansion and disciplined working capital management.

So with that, I'll turn it back over to Steve to expand on the value creation potential of the combined enterprise.

Steve Deitsch -- Senior Vice President Chief Financial Officer & Treasurer

Thanks, Mike. Taking a look at slide 15, you can see how the transaction results in a capital structure that enhances the combined Companies' cash flow profile and financial capacity to pay down debt and invest in the Company's near and long-term growth initiatives.

As the chart demonstrates instead of paying as BioScrip currently does, nearly 90% of its adjusted EBITDA to pay down debt, the combined Company will reduce that to 50%, thus freeing up cash to invest back into the business and fuel growth.

All in all, we will be able to drive even more growth opportunities for the business including continuing to invest in enhanced patient experiences as well as investing in our people, processes, technologies and facilities to achieve growth, uphold the highest quality of services and provide innovative solutions to the healthcare system.

I'll turn it back to Dan for his concluding remarks.

Daniel E. Greenleaf -- President & Chief Executive Officer

Thanks, Steve. Before we open the floor to questions, I'd just like to reiterate my excitement of the value creation of this potential -- of this potential of this transaction. This transaction marks a powerful expansion of our individual product offering and footprints, and together, we will bring deep clinical expertise in a broad therapy portfolio to make a positive difference in even more people's lives. Industry dynamics, as I have stated before, have never been better.

This combination creates a leading independent platform to capitalize on the growing demand for home and alternative site infusion services, and how we want to deliver care in the future, particularly through our diverse set of life improving cost-effective services.

I have the utmost confidence that we have the right team in place to first integrate, then capitalize on the opportunities inherent in this combination, particularly when (inaudible) owners that will help achieve growth and significant long-term value appreciation.

Personally, I am thrilled about what this combination will do for all stakeholders, including the industry, and while I continue to -- as CEO of BioScrip until the close of the transaction, I'm excited to be a Special Advisor to the Board of the combined Company because, I believe in the merits of this transaction and the resulting growth profile. The opportunity that the union of these two leading high-performing companies brings to our payers, providers, biopharma manufacturers, patients, teammates and our valued shareholders is tremendous and greater than we could achieve on our own.

Our excitement is obvious, and each (ph) of us also would like to thank our teammates and employees for their dedication to providing the highest quality care in the home infusion industry. And I'd also like to make a call out to the Board of Directors at BioScrip, because I could not have done this without you.

We are confident that together we will be able to drive even more growth opportunities for the business and provide our team members with professional development opportunities.

We will now take your questions.

Questions and Answers:

Operator

At this time we will be conducting a question-and-answer session.

(Operator Instructions)

Our first question comes from the line of David McDonald with SunTrust. Please proceed with your question.

David Samuel MacDonald -- SunTrust Robinson Humphrey, Inc. -- Analyst

Good morning, guys. Congratulations. Look, I guess the first question I would have is now we're hearing a lot from the payers in terms of the move toward value-based care, side of care redirection, et cetera. I was wondering, if you could just dig into that a little bit more, conversations you're having with the big national payers, do you see this deals an accelerant to some of those value-based care conversations and then, obviously there's been some changes in terms of the dynamics in terms of independents, can you also talk about the uniqueness of being a scaled independent player while you're having those conversations?

Daniel E. Greenleaf -- President & Chief Executive Officer

Yeah, Dave, I'll all start this one out, but I would also love to hear from John and Mike on this as well. And as it relates to value-based care, there is no question that scale, size, scope, breadth matters -- and resources. And candidly, Dave, these types of relationships are enhanced by the scale, size, breadth, scope and our ability to invest. And I believe this allows us to get on the leading edge of those kinds of relationships, and we've done a lot of work as you know in this area, Dave, and we believe there is -- there are significant opportunities to move that forward. So I think that's a really good question, Dave. And I believe this only enhances our ability to address where the market is going.

You had a second question too Dave?

David Samuel MacDonald -- SunTrust Robinson Humphrey, Inc. -- Analyst

Yeah. Just look, there's obviously been some major transactions in the space and you're now in terms of your independence, I think that's probably a little bit more of a differentiator now on a go-forward basis, if you could just speak to that a little bit.

Daniel E. Greenleaf -- President & Chief Executive Officer

Yeah. And again I'll let also John and Mike jump in on this too, but there's no question. I mean, I think there is real value in having a nimble, high-speed, high performing entrepreneurial, innovative, independent Company in this space. And I fundamentally believe that we can move faster than our competitors and be more focused than our competitors. And now that the Company has the resources, the Company that have the scope, the breadth, it really has a chance to be in a position to absolutely unequivocally transform, architect, define, design this industry. So with that, I'll turn it over to both Mike -- both John and Mike.

John C. Rademacher -- Chief Executive Officer

Yeah. Thanks, Dan. Dave, I look at those two questions actually as one in the sense, we are in a really strong position as an independent provider. And as we outlined with now the expanded reach that we have as well as the enhanced product portfolio, we believe we will be the partner of choice to help drive site of care initiatives that we are feeling today and working with many of the payers in different conversations. And the opportunity for us to continue to leverage that as we move forward.

Those conversations are important. And as Dan said, we believe we will be leading that charge with our ability to have conversations with all commercial payers for that opportunity. It's all about outcome. And our focus around driving clinical care and a patient-centric approach is well received by the payers and the patients, and that is something that again is the hallmark of us as an organization is focusing around driving high quality at appropriate costs.

David Samuel MacDonald -- SunTrust Robinson Humphrey, Inc. -- Analyst

Okay. And then if I could just sneak one follow up in there. What -- obviously the legacy capital structure at BioScrip has been a little bit challenging. I was wondering with more financial flexibility, if you could just run through the top -- maybe couple of areas where now that you've got a little bit more money to spend upon closing of investment and opportunity that you see now that you've got again a little bit more financial flexibility?

Daniel E. Greenleaf -- President & Chief Executive Officer

Yes, I'd like to have John and Mike to answer that one, please.

Mike Shapiro -- Chief Financial Officer

Yeah, Dave. How you doing? It's Mike Shapiro here. Look, obviously, there are more --

David Samuel MacDonald -- SunTrust Robinson Humphrey, Inc. -- Analyst

Hey Mike. How you doing?

Mike Shapiro -- Chief Financial Officer

Great, great. Look one of the things we're excited about is the capital structure that we're putting in place with committed financing at this point. It can be very patient capital structure, no near-term maturities, very manageable as Steve clearly outlined around the utilization of run rate EBITDA to service that debt. And as we relentlessly focus on cash flow generation, again, this is a growing enterprise. So first and foremost, we're going to continue to fund the growth through our people, in the technologies and the quality systems that we've established.

And frankly beyond that, the near-term priorities are going to be utilizing that capital to implement the synergies and bring these organizations together, but we are excited about look, longer-term, it gives us the flexibility to think about how best to deploy it for value creation, whether it's incremental M&A, further down the road, deleveraging or continuing to invest in organic growth. So really excited about the flexibility it offers us.

David Samuel MacDonald -- SunTrust Robinson Humphrey, Inc. -- Analyst

Okay. Thanks very much.

Daniel E. Greenleaf -- President & Chief Executive Officer

Thanks, Dave.

Operator

You our next question comes from the line of Richard Kortje with Canaccord. Please proceed with your question.

Richard Kortje -- Canaccord -- Analyst

Great. Thanks for the questions. Congratulations here. I guess, as questions or for Mike and John. I just wonder, if you could provide us some additional details on Option Care's historical financial performance. I see you got the two year CAGR in there. I'm just curious about the margin trends in the business maybe since you've took a private in the transaction back in 2015?

Mike Shapiro -- Chief Financial Officer

Yeah, Rich. Sure, it's Mike and I will -- I'll start and obviously I'll let John fill in. Look, over the -- over the, as we've outlined on slide four, we've delivered since separation above market top line growth. And as all you know, there have been some reimbursement disruptions in there along the way. So very proud about the top line performance since separation. And as John alluded to, that also include the introduction of some new to world therapies, which we've been able to expand the portfolio across our payer relationships.

At the same time, again, after separation, once we stood up the organization as an independent organization, we've really started to hit our stride on delivering leveraged growth, which is we talk about is driving earnings in excess of the top line expansion. And so that's afford us the opportunity to invest in new facilities and new technologies. And so since separation, we're really proud of the track record that we've put up.

John C. Rademacher -- Chief Executive Officer

Yeah. And I would add, look, we've made significant investment into people, process, technology and our facilities, and that has allowed us to drive operating efficiencies as Mike said. We have been maniacally focused around making certain that we were growing EBITDA faster than the top line, using that leverage and strength that we had for the position in order to move that ahead.

So proud of the track record that we had. We took a pretty sizable punch with the Cures Act as everyone in the industry did, and not only did we withstand that, but have grown since then. So feel like we're in a really good position and have a fantastic platform for growth.

Richard Kortje -- Canaccord -- Analyst

Okay. And my follow-up question I guess is on this $60 million plus in synergies. Is there any way you guys can provide areas where you see the savings, where that $60 million is essentially coming from?

Daniel E. Greenleaf -- President & Chief Executive Officer

Yeah. So we've really defined it in three primary areas. We think that there are efficiencies in procurement and supply chain efficiencies that we can operate from that perspective. We believe that there's opportunities in driving just overall execution and operating efficiencies. And the third area that we've identified is really looking at the combination of streamlining the administrative services of both organizations.

So we look at those as probably equal buckets in the way that we've defined it as we look forward, and we are -- we'll be putting in place a very comprehensive integration plan as we move forward. So that we can hit the ground running day one after the close.

Richard Kortje -- Canaccord -- Analyst

Great. Thank you.

Operator

Our next question comes from the line of Brooks O'Neil with Lake Street Capital Markets. Please proceed with your question.

Brooks O'Neil -- Lake Street Capital Markets -- Analyst

Sure. Good morning. I'm trying to value the new Company, you guys have given us a lot of detail, but the two pieces that I need to kind of complete my picture are the number of pro forma common shares that will be included at closing and also the cash position of the combined Company.

Steve Deitsch -- Senior Vice President Chief Financial Officer & Treasurer

Mike, do you want to take that one?

Mike Shapiro -- Chief Financial Officer

Yeah, you bet, Steve. Yeah. So morning, Brooks. Look, it -- post close based on the pro forma ownership, we would expect the post close share count to be approximately $682 million. And as we -- and as I mentioned Brooks, we at this point have committed financing in place, naturally that will simplify as Dan mentioned, simplify the capital structure across both enterprises.

It's also going to provide us with adequate liquidity to A, bring these organizations together, integrate and drive their organizations on a combined basis. So we will post combination, we will enter the world as a combined organization with a very strong liquidity profile.

Brooks O'Neil -- Lake Street Capital Markets -- Analyst

That's great. Did you say 182 million shares, Mike?

Mike Shapiro -- Chief Financial Officer

No 682 million shares.

Brooks O'Neil -- Lake Street Capital Markets -- Analyst

682 million shares.

Mike Shapiro -- Chief Financial Officer

That's correct, Brooks.

Brooks O'Neil -- Lake Street Capital Markets -- Analyst

Okay. And then my second question, I'm just curious, maybe for Dan, I see on page four, the pro forma EBITDA, you had $45 million Option Care, $95 million, I do the math, 32% BioScrip, 68% Option Care. Help us understand how you got comfortable with 20% of the combined Company going to BioScrip shareholders? Thank you and good luck going forward.

Daniel E. Greenleaf -- President & Chief Executive Officer

Yeah. Hey, thanks, Brooks. I mean it's really related to the debt in our capital structure, Brooks. That's the delta.

Brooks O'Neil -- Lake Street Capital Markets -- Analyst

Thank you.

Operator

Our next question comes from the line of Mike Petusky with Barrington Research. Please proceed with your question.

Mike Petusky -- Barrington Research -- Analyst

Yeah. Good morning guys. So, I guess I want to understand, I'm a little surprised that the margins that Option Care given the scale, the payer mix aren't a little bit more attractive. And I'm just wondering, is there -- I understand Cures and all the rest. But, is there a more normalized margin run rate that you guys feel is attainable over the next few years or is sort of mid-single digits about what you would expect?

Daniel E. Greenleaf -- President & Chief Executive Officer

Yes. I'll let -- I'll let John and Mike answer that.

John C. Rademacher -- Chief Executive Officer

Yeah. Thanks, Mike for the question. So, first and foremost, when you look at the breadth of our product portfolio, we have some specialty products that are very high in reimbursement rate, but they're lower margined based on the size of that -- or the cost of that therapy. And so, that drag down when you look at a blended basis, the overall margin on that.

As we've mentioned previously, we've been spending significant amount of time with our investments to drive operating efficiencies and really make certain that we are focused around reducing the cost of service, through that -- through those efficiencies and the deployment of that technology. Our expectations is that is going to continue to expand as we move forward and we can leverage and sweat (ph) the asset across the enterprise, and we will continue to really focus on making certain that we're driving that overall EBITDA expansion.

We've invested tens of millions of dollars into our just overall efficiency model into technology and our facilities, and we really feel good about having an industrial strength infrastructure and that ability to sweat (ph) those assets moving forward.

Mike Petusky -- Barrington Research -- Analyst

Okay. All right, fair enough. And I'm sorry if I may have missed this earlier, but how are you guys going to handle branding going forward from a clinical perspective? And also just from stock, is this going to continue to trade on BIOS or sell sides of that place? Thanks.

Daniel E. Greenleaf -- President & Chief Executive Officer

Yeah. Mike, this is Dan Greenleaf. John, if you'd like to answer that please.

John C. Rademacher -- Chief Executive Officer

Yeah. No. Thanks, Dan. I guess, we were -- as part of the overall integration plan, that is something that we will be working with both teams to really understand and define. We know there is substantial brand equity with both organizations. And so we are going to be thoughtful about what is the decision that we will make and make certain that we have the right branding to represent the value that we bring into the marketplace.

Mike Petusky -- Barrington Research -- Analyst

Okay. And then just, is it going to continue to trade under Bioscrip in terms of...

John C. Rademacher -- Chief Executive Officer

Yeah. That's yet to be determined.

Mike Petusky -- Barrington Research -- Analyst

Okay. Thanks guys. Appreciate it.

Operator

Our next question comes from the line of Kevin Ellich with Craig-Hallum. Please proceed with your question.

Kevin Ellich -- Craig-Hallum Capital -- Analyst

Hey, guys. Good morning, congratulations on the transaction. Just wanted to start off with synergies, you guys clearly laid out the cost synergies. Could you talk about if there is any revenue synergies from the combined Company, especially with the managed care commercial relationships?

Daniel E. Greenleaf -- President & Chief Executive Officer

Hello?

Kevin Ellich -- Craig-Hallum Capital -- Analyst

Yeah. Can you hear...

Daniel E. Greenleaf -- President & Chief Executive Officer

Yeah. This is -- just hey -- I would -- John and Mike, I'll let you answer that.

Mike Shapiro -- Chief Financial Officer

Yeah, Kevin, how you doing? It's Mike Shapiro. So look the way that we've articulated and outlined the value creation again in the deck as John outlined, we've identified approximately $60 million in synergies. To be clear that doesn't include any revenue synergies. And I think as you picked up on the excitement from the prepared remarks, there is a tremendous amount of excitement around how we provide that national footprint in broader therapy portfolio. So naturally, we would expect that as this resonates with our payers and health systems, there is an opportunity there. But specifically as it relates to how we've outlined the value here to date, we've not included any specific revenue synergies.

Kevin Ellich -- Craig-Hallum Capital -- Analyst

Okay. But I mean would you expect to achieve some I hope?

John C. Rademacher -- Chief Executive Officer

Yeah, this is John. Over the long run, yes, we do. But we also are trying to be thoughtful, because we know there will be disruption as we're looking to bring the organizations together. We've tried to be thoughtful and balanced in the way that we're looking at it and provides you with a sense of where we know there are achievable synergies in that 24-month horizon.

So our focus is around where those are and making certain that they are achievable and trackable as we're looking at moving this forward.

Kevin Ellich -- Craig-Hallum Capital -- Analyst

Okay. And then, John, you actually kind of segued into my next question, which was...

Daniel E. Greenleaf -- President & Chief Executive Officer

Hey, Kevin. Can I say something too?

Kevin Ellich -- Craig-Hallum Capital -- Analyst

Sure, Dan.

Daniel E. Greenleaf -- President & Chief Executive Officer

Yeah. I just -- I think these synergies are there is a lot of opportunity here. I don't, I won't squirm for you, but clearly, Kevin, I wouldn't have -- I would not have recommended that we go forward with something like this, unless I felt that there were substantial synergies that our shareholders could take advantage of.

Kevin Ellich -- Craig-Hallum Capital -- Analyst

Great. And I appreciate that color there Dan. And then, John, you were talking about little disruption. Just wondering, clearly, there is a nice footprint combined nationally, wondering, if you've -- what you've modeled in or if you can quantify any potential customer attrition or expected divestitures that you guys might need to get done to complete the transaction?

John C. Rademacher -- Chief Executive Officer

Yeah. And look, we've contemplated within the -- within the comprehensive way that we've looked at the overall transaction which inclusive in that $60 million is -- it's net of about cost to achieve as well as where we see the disruption. We didn't really spike that out as through a separate line item, but it's something that has been factored into the overall net.

Kevin Ellich -- Craig-Hallum Capital -- Analyst

Got it. Thanks, guys and congrats again.

Daniel E. Greenleaf -- President & Chief Executive Officer

Hey. Thank you, Kevin.

John C. Rademacher -- Chief Executive Officer

Thanks.

Operator

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I'd like to turn the call back to Dan Greenleaf for closing remarks.

Daniel E. Greenleaf -- President & Chief Executive Officer

All right. Well, thank you everyone for joining today's call. I also want to thank John and Mike for joining to discuss today's exciting announcement. And I look forward to -- we do have another -- that concludes today's conference call and you may disconnect.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation

Duration: 52 minutes

Call participants:

Kathryn M. Stalmack -- Senior Vice President and General Counsel

Daniel E. Greenleaf -- President & Chief Executive Officer

Steve Deitsch -- Senior Vice President Chief Financial Officer & Treasurer

John C. Rademacher -- Chief Executive Officer

Mike Shapiro -- Chief Financial Officer

David Samuel MacDonald -- SunTrust Robinson Humphrey, Inc. -- Analyst

Richard Kortje -- Canaccord -- Analyst

Brooks O'Neil -- Lake Street Capital Markets -- Analyst

Mike Petusky -- Barrington Research -- Analyst

Kevin Ellich -- Craig-Hallum Capital -- Analyst

More BIOS analysis

Transcript powered by AlphaStreet

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

More From The Motley Fool

Motley Fool Transcribers has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.