DEFM14A: Premier, Inc. to Go Private in $2.8B Cash Deal

Premier, Inc. stockholders are invited to a special meeting on November 21, 2025, to vote on a definitive merger agreement for its acquisition by Patient Square Capital for $28.25 per share in cash, valuing the company at approximately $2.8 billion.

Summary

• Premier, Inc. (PINC) will be acquired by Premium Parent, LLC, an indirect subsidiary of Patient Square Capital, LP, for $28.25 per share in cash.
• The total transaction value is approximately $2.8 billion.
• The merger requires approval by a majority of the voting power of the issued and outstanding shares of Class A common stock.
• The Board of Directors unanimously recommends voting FOR the merger agreement proposal, the advisory compensation proposal, and the adjournment proposal.
• A special meeting of stockholders will be held virtually on November 21, 2025, at 11:00 a.m. Eastern Time.
• Outstanding Company Options will be canceled for no consideration.
• Company RSU Awards and Company PSU Awards granted before August 16, 2025, will be converted into cash based on the merger consideration, with PSU awards determined by actual performance for completed periods and target performance for incomplete periods (68.75% for FY24-26 for non-NEOs, 0% for NEOs; 105.17% for FY25-27).
• Company RSU Awards and Company PSU Awards granted on or after August 16, 2025, will be canceled for no consideration.
• The Company's Employee Stock Purchase Plan (ESPP) will terminate, with outstanding purchase rights automatically exercised prior to the effective time.
• The merger is expected to be consummated by the first quarter of calendar year 2026.

Sentiment

Score: 7

Explanation: The merger provides immediate, certain cash value at a significant premium over recent trading prices, and the Board unanimously supports it after a thorough process. The committed financing and strong deal protection provisions enhance certainty. However, the cancellation of some equity awards for no consideration and the potential for a delayed closing are minor drawbacks.

Positives

• Provides immediate, certain cash value and liquidity to Class A common stockholders at $28.25 per share.
• The merger consideration represents a 23.8% premium over the 60-day volume-weighted average price (VWAP) of the Company's stock as of September 5, 2025, the last undisturbed trading day prior to media reports.
• The Board unanimously determined the merger is fair to, and in the best interests of, the Company and its stockholders.
• Financing for the merger is committed and not a condition to closing, reducing transaction risk.
• Patient Square Capital has a strong reputation and industry expertise in healthcare, with a successful track record in completing acquisitions.
• The merger agreement includes provisions for specific performance, allowing the Company to enforce Parent's obligations to close.
• A Parent termination fee of $168,550,000 provides significant protection to the Company if Parent defaults on its obligations.
• The Company successfully negotiated to eliminate a complex and risky Contingent Value Right (CVR) component in favor of a higher all-cash offer, providing greater certainty of value for stockholders.
• Both Goldman Sachs & Co. LLC and BofA Securities, Inc. rendered fairness opinions to the Board regarding the merger consideration.

Negatives

• Stockholders will no longer own shares of the company and will not participate in any future earnings or growth.
• Company Options outstanding at the effective time will be canceled for no consideration.
• Company RSU and PSU Awards granted on or after August 16, 2025, will be canceled for no consideration.
• The exchange of Class A common stock for cash is a taxable transaction for U.S. federal income tax purposes for U.S. holders.
• Restrictions on the Company's business operations are in place until the merger closes.
• There is a potential negative impact on the Company's ability to attract, hire, and retain key employees if the merger does not close.
• The Company termination fee of $66,215,100, payable under certain circumstances, could potentially discourage other potential acquirors from making alternative proposals.
• The merger agreement includes an 'inside date' provision, meaning if closing has not occurred by November 26, 2025, it will not occur prior to January 27, 2026, without Parent's consent, potentially delaying the transaction.

Risks

• Inability to consummate the merger within the anticipated time period, or at all, due to failure to obtain required regulatory approvals, stockholder approval, or complete contemplated financing arrangements.
• Risk that any announcements relating to the merger could have adverse effects on the market price of the Company Class A Common Stock.
• 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 others.
• 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.
• 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.
• Market and sector risks not viewed by management as within the control of the Company, which might adversely affect the Company's ability to realize its long-range plan.
• The rapidly evolving nature of the healthcare improvement sector, including increasing competitive intensity.
• Challenges in the Company's ability to continue to grow revenue, execute appropriate acquisitions, and attract required talent for its performance services business.
• Risks related to the Company's ability to sustain and expand margins while maintaining high quality of services.
• Macroeconomic risks that may impact the Company and its customers, including changes to government-sponsored health care programs and tariffs.
• Operational risks that could negatively impact the Company's reputation with its customers.
• Parent and Merger Sub are newly formed entities with no assets, and the limited guaranty provided by Patient Square Capital has an aggregate cap of $174,350,000, limiting recourse for certain obligations.

Future Outlook

The Company's long-range plan forecasts revenue growth in its supply chain services business (mid-single digit for acute sites, mid-to-high single digit for continuum of care sites) and a compounded annual growth rate of 26% for advisory revenue in its performance services business from fiscal years 2026 through 2030. It also anticipates additional cost reductions in fiscal year 2027 and reinvestment in fiscal year 2028 to support growth initiatives. However, these forecasts are subject to significant market, sector, and operational risks, and there is no assurance that the projected results will be realized.

Management Comments

• The Board unanimously determined that the terms of the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, the Company and its stockholders.
• The Board unanimously resolved to recommend that the Company's stockholders adopt the merger agreement.
• The Board concluded that negotiating with Patient Square Capital for the highest possible all-cash offer was the value-maximizing path for the Company's stockholders, especially given the significant risks and difficulties associated with a Contingent Value Right (CVR) component.

Industry Context

Premier, Inc. operates as a technology-driven healthcare improvement company, uniting providers, suppliers, payers, and policymakers. The industry is characterized by its rapidly evolving nature and increasing competitive intensity. The Board considered that remaining a public company involved costs related to strategic and operational transparency to competitors, and faced challenges in meeting long-range plan forecasts due to capital requirements, talent acquisition, and current regulatory/financial pressures. The move to go private with Patient Square Capital, a firm specializing in healthcare, suggests a strategic shift to navigate these challenges potentially with more agility and less public scrutiny.

Comparison to Industry Standards

• Goldman Sachs' analysis of all-cash U.S. LBO transactions ($2B-$5B) from January 1, 2018, to September 19, 2025, showed a median premium of 32%, with the 25th percentile at 21% and 75th percentile at 47%. The $28.25 offer represents a 9.3% premium over the undisturbed closing price of $25.85 on September 5, 2025, which is below the median and 25th percentile of these comparable LBO transactions.
• BofA Securities reviewed EV to NTM Adj. EBITDA multiples for selected publicly traded companies in healthcare supply chain and performance services. The observed range was 6.1x to 13.9x (mean 10.4x, median 11.1x) for CY2025E and 5.7x to 12.7x (mean 9.5x, median 10.2x) for CY2026E. The Company's multiples (8.5x-8.8x for CY2025E and 8.7x-9.0x for CY2026E) place it within the lower to mid-range of these comparable companies.
• BofA Securities' analysis of EV to NTM Adj. EBITDA multiples for selected precedent transactions in healthcare supply chain and performance services showed a range of 7.8x to 13.2x (mean 11.2x, median 11.6x). The implied equity value per share range for the Company from this analysis was $22.25 to $33.40, with the $28.25 offer falling within this range.
• The Board observed that the use of Contingent Value Rights (CVRs) is typically concentrated in the pharmaceutical industry and based on more tangible milestones (e.g., regulatory approvals), which are generally less susceptible to an acquirer's operational and accounting decisions compared to projected adjusted EBITDA.

Management Changes

Corporate Governance

Legal Proceedings

• No pending or, to the Knowledge of the Company, threatened (in writing) Actions before any Governmental Authority to which the Company or any of its Subsidiaries is a party that would reasonably be expected to have a Material Adverse Effect.
• No outstanding judgment, order, writ, injunction, decree, or award of any Governmental Authority or corporate integrity agreement/deferred prosecution agreement regarding non-compliance with any Law that would reasonably be expected to have a Material Adverse Effect.
• The Company has agreed to promptly notify Parent of any stockholder litigation or claims against the Company or its representatives arising out of or relating to the merger and to keep Parent reasonably informed. The Company will provide Parent an opportunity to review and comment on filings/responses and participate in defense/settlement (at Parent's expense), but the Company will control the defense and cannot settle without Parent's consent.

Related Party Transactions

• Since June 30, 2024, there have been no Contracts or transactions, nor are any currently proposed, that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Securities Act that have not been disclosed in the Company Reports filed as of the date of the agreement.

Stakeholder Impact

• **Shareholders**: Will receive $28.25 in cash per share, providing immediate liquidity and a premium over recent trading prices. They will no longer hold an ownership interest in the Company and will not participate in its future earnings or growth. Appraisal rights are available for eligible stockholders.
• **Employees**: Continuing employees will be provided with a base salary/wage no less than prior to the merger, annual target cash bonus opportunities no less favorable, and other employee benefits (excluding certain types) substantially comparable in the aggregate for one year post-closing. Unvested Company Options will be canceled for no consideration. Other unvested RSU and PSU awards will be cashed out based on the merger consideration, with specific performance criteria applied to PSU awards. Executive officers have severance benefits upon qualifying termination.
• **Customers, Suppliers, and Vendors**: The Company is committed to preserving its business organizations intact and maintaining existing significant business relationships. However, there is a potential for disruption if the merger is not consummated.
• **Creditors**: Existing outstanding indebtedness of the Company and its subsidiaries will be repaid or refinanced as part of the merger financing, ensuring their obligations are addressed.

Next Steps

• Company stockholders are to vote on the merger agreement proposal, advisory compensation proposal, and adjournment proposal at the special meeting on November 21, 2025.
• The HSR Act waiting period is expected to expire on November 13, 2025, unless terminated earlier or extended.
• The consummation of the merger is expected by the first quarter of calendar year 2026.
• Following the merger, Company Class A common stock will be delisted from Nasdaq and deregistered under the Exchange Act.
• Parent and Merger Sub will negotiate and enter into definitive agreements for the debt financing.
• The Company will provide customary cooperation for the arrangement of the debt financing.

Key Dates

Recommendation

The Board's unanimous recommendation, coupled with the all-cash offer providing immediate liquidity and a significant premium (23.8% over the 60-day VWAP prior to media reports), makes this an attractive proposition for stockholders. The committed financing and strong deal protection provisions, including a substantial Parent termination fee, reduce execution risk. While the loss of future upside is a consideration, the certainty of value in a challenging market environment, especially after a prior strategic review yielded no viable offers, supports a positive outlook for current shareholders to accept the offer.

Keywords

Premier Inc., PINC, Patient Square Capital, Merger, Acquisition, Healthcare, Technology-driven healthcare, Supply chain solutions, Corporate governance, SEC filing, Proxy statement, Cash acquisition, Stockholder vote, Private equity, Financial advisory, Risk management