Bergen Brunswig Will Buy Puerto Rico Firm

Bergen Brunswig Corp., the third-largest U.S. drug wholesaler, said it will buy closely held J.M. Blanco Inc. for an undisclosed price to expand into Puerto Rico and the Virgin Islands.

Blanco, based in Guaynabo, Puerto Rico, is the largest pharmaceutical distributor in Puerto Rico and the Virgin Islands, with revenue of more than $200 million, Bergen said. The company would operate as a subsidiary of Orange-based Bergen after the transaction closes in January. Bergen Brunswig and other major drug wholesalers such as McKesson Corp. and Cardinal Health Inc. are snapping up companies to expand the size and scope of their offerings. Earlier this month, Bergen Brunswig bought Stadtlander Drug Co. to expand its distribution of specialty drugs for HIV and other illnesses.

For Bergen Brunswig, which had revenue of $17.1 billion last year, expanding into new markets is as important as adding Blanco’s $200 million in revenue, analysts said.

Bergen’s stock rose $1.38 to $62.94 a share, near the 52-week high of $63.94 that it reached Monday. The shares had traded as low as $33.63 early in September.

The drug wholesaler industry was thrown into flux earlier this year when a U.S. federal judge blocked transactions that would have combined the four largest wholesalers into two. Since then, McKesson bought HBO & Co., a medical software maker.

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Bergen Recovery

Bergen Brunswig Corp.’s stock has rebounded strongly since hitting a 52-week low of $33.63 on Sept. 1. The company has been making acquisitions since a federal judge squelched plans for a mega-deal in which No. 2 drug wholesaler Cardinal Health would have acquired No. 3 Bergen. Weekly closing prices:

Aug. 28: $37.00

Wednesday’s close: $62.00

Source: Bloomberg News