DEFA14A: Premier Inc. Addresses Merger Litigation with Supplemental Disclosures

Premier Inc. filed supplemental disclosures to its definitive proxy statement to address stockholder litigation and demands related to its pending acquisition by Patient Square Capital for $28.25 per share.

Summary

• Premier, Inc. entered into an Agreement and Plan of Merger on September 21, 2025, to be acquired by Premium Parent, LLC, an indirect subsidiary of funds managed by Patient Square Capital, LP, for $28.25 in cash per share of Class A common stock.
• Following the filing of the Definitive Proxy Statement on October 22, 2025, three lawsuits were filed by purported stockholders, alleging the proxy statement is misleading and omits material information regarding the sales process, financial projections, and financial analyses.
• Stockholder demand letters also raised similar deficiencies in the preliminary and definitive proxy statements.
• Premier believes the claims are without merit and that supplemental disclosures are not legally required, but is providing them to mitigate the risk of merger delays and to minimize litigation costs and uncertainties, without admitting any liability or wrongdoing.
• Supplemental disclosures include additional details on the confidentiality agreement with Patient Square Capital, extended management financial forecasts through fiscal year 2039, and further specifics on the financial analyses conducted by Goldman Sachs & Co., LLC and BofA Securities, Inc.

Sentiment

Score: 5

Explanation: The filing addresses ongoing litigation related to a merger, which introduces uncertainty and costs. While the company denies the claims, the need for supplemental disclosures indicates a material issue. The merger itself offers a cash exit for shareholders, but the litigation could delay or complicate it. The financial forecasts show long-term growth, but the immediate focus is on the merger's completion amidst legal challenges.

Positives

• The company is subject to a definitive merger agreement at $28.25 per share in cash, offering a clear exit for shareholders.
• Management is proactively addressing litigation concerns by providing supplemental disclosures to avoid potential delays and minimize associated costs and risks.

Negatives

• Three lawsuits and multiple demand letters have been filed by purported stockholders, alleging material deficiencies in the merger proxy statement.
• The litigation seeks remedies such as enjoining the merger or rescission/rescissory damages, introducing uncertainty and potential costs to the transaction.
• The company is incurring legal costs and management attention is being diverted to address the litigation.

Risks

• Inability to consummate the merger within the anticipated time period, or at all, due to reasons such as failure to obtain required regulatory approvals, stockholder approval, or complete contemplated financing arrangements.
• Adverse effects on the market price of Premier Class A Common Stock resulting from merger-related announcements.
• Disruption from the merger making it more difficult to maintain business and operational relationships, including retaining and hiring key personnel and maintaining relationships with customers, vendors, and other business partners.
• The occurrence of any event, change, or other circumstances that could give rise to the termination of the merger agreement.
• Risks related to disruption of the company's current plans and operations or the diversion of management's attention from ongoing business operations due to the merger.
• Significant transaction costs associated with the merger.
• The risk of litigation and/or regulatory actions related to the merger or unfavorable results from currently pending litigation and proceedings or litigation and proceedings that could arise in the future.

Future Outlook

The company's management forecasts project continued growth in Total Revenue, Adjusted EBITDA, and Unlevered Free Cash Flow through fiscal year 2039. The merger is expected to close, but is subject to various risks including regulatory approvals, stockholder approval, financing, and the outcome of ongoing litigation.

Management Comments

• The Company believes that the claims asserted in the Matters are without merit and supplemental disclosures are not required or necessary under applicable laws.
• To avoid the risk that the Matters delay or otherwise adversely affect the merger, and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, the Company is supplementing the Definitive Proxy Statement.
• The Company specifically denies all allegations in the Matters that any additional disclosure was or is required or material.

Industry Context

The acquisition of Premier Inc. by Patient Square Capital, a private equity firm specializing in healthcare, reflects ongoing consolidation and private investment interest in the healthcare supply chain and performance services sectors. The detailed financial analyses by Goldman Sachs and BofA Securities, including comparisons to publicly traded companies like McKesson, IQVIA, and R1 RCM, and precedent transactions, provide insight into valuation benchmarks within these industries. The litigation highlights the increasing scrutiny of merger disclosures, particularly regarding financial projections and advisor analyses, a common trend in complex M&A transactions.

Comparison to Industry Standards

• BofA Securities' analysis of selected publicly traded companies in the healthcare supply chain services and performance services industries showed EV / CY 2025E Adj. EBITDA multiples ranging from 6.1x to 13.9x (mean 10.4x, median 11.1x).
• Premier's EV / CY 2025E Adj. EBITDA multiple was 8.5x (Management Projections) and 8.8x (Wall Street research) on an unaffected basis, placing it below the mean and median of comparable public companies.
• Selected precedent transactions in the healthcare supply chain and performance services industries had EV to NTM Adj. EBITDA multiples ranging from 7.8x to 13.2x (mean 11.2x, median 11.6x).
• The acquisition price of $28.25 per share falls within Goldman Sachs' illustrative DCF range of $27.59 to $36.58, but is above the lower end of their equity value per share analysis ($22.18 to $30.86) and significantly above the Wall Street analysts' price targets range of $18.15 to $25.41.

Legal Proceedings

• Three individual lawsuits have been filed by purported stockholders: Clark v. Premier, Inc. et al., Johnson v. Premier, Inc. et al., and Garfield v. Premier, Inc. et al.
• The complaints generally allege that the Definitive Proxy Statement is misleading and omits/misrepresents material information regarding the sales process, financial projections, and financial analyses.
• The lawsuits seek to enjoin the merger, obtain rescission or rescissory damages, and recover costs including attorneys' and experts' fees.
• Purported stockholders have also sent demand letters alleging similar deficiencies in the proxy statements.
• The company believes these claims are without merit but is providing supplemental disclosures to mitigate litigation risks and potential delays to the merger.

Related Party Transactions

• Funds managed by affiliates of Goldman Sachs (financial advisor to Premier) that are almost entirely for the benefit of third-party clients are invested in funds managed by affiliates of Patient Square Capital (the acquirer).

Stakeholder Impact

• Shareholders face uncertainty due to litigation that could potentially delay or affect the merger. While the $28.25 cash per share offer provides a potential exit, the lawsuits question the adequacy of disclosures related to the valuation.
• Management and employees may experience diverted attention from ongoing business operations due to the merger process and litigation. There is a risk of difficulty in retaining and hiring key personnel if the merger is prolonged or uncertain.
• Customers and vendors could face potential disruption to business and operational relationships if the merger process becomes protracted or contentious due to legal challenges.

Next Steps

• Stockholders are urged to read all relevant documents filed or to be filed with the SEC, including the Definitive Proxy Statement and its supplements, before making any voting decision on the merger.
• The merger will be submitted to the Company's stockholders for their consideration.
• The company may receive additional similar complaints and/or demand letters in the future, which it may not necessarily disclose absent new or significantly different allegations.

Key Dates

Recommendation

The stock is currently subject to a definitive merger agreement at $28.25 per share. While litigation introduces uncertainty and potential delays, the company is actively addressing these concerns with supplemental disclosures. The acquisition price is above current analyst targets, suggesting a premium. Investors should hold to realize the merger consideration, but be aware of the risks of delay or termination due to the ongoing legal challenges. The supplemental disclosures aim to strengthen the merger's legal standing, which is a positive for deal completion.

Keywords

Premier Inc., PINC, Merger, Acquisition, Patient Square Capital, Proxy Statement, SEC Filing, Litigation, Shareholder Lawsuit, Financial Forecasts, Healthcare Supply Chain, Performance Services, M&A