Pomerantz LLP announces that a class action lawsuit has been filed against CVS Health Corporation ("CVS" or the "Company") CVS, -1.22% and certain of its officers and directors. The class action, filed in United States District Court, Southern District of New York, and indexed under 19-cv-01725, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise acquired CVS Health securities between May 21, 2015 and February 20, 2019, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased CVS securities during the Class Period, you have until April 26, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
CVS Health was founded in 1892 and is headquartered in Woonsocket, Rhode Island. The Company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. CVS Health, together with its subsidiaries, provides integrated pharmacy health care services, operating through its Pharmacy Services and Retail/LTC segments.
On May 20, 2015, CVS Pharmacy, Inc. ("CVS Pharmacy"), a wholly owned subsidiary of CVS Health, entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire Omnicare, Inc. ("Omnicare"), a provider of pharmaceuticals and related pharmacy services to long-term care facilities and provider of specialty pharmacy and commercialization services for the bio-pharmaceutical industry (the "Omnicare Acquisition"). According to CVS Health's SEC filings, upon the effective date of the Omnicare Acquisition, each share of common stock, par value $1.00 per share, of Omnicare would be converted into the right to receive $98.00 in cash, or approximately $10.6 billion in the aggregate. In addition, CVS Pharmacy would assume approximately $2.3 billion in debt of Omnicare.
On August 18, 2015, CVS Health acquired 100% of the outstanding common shares and voting interests of Omnicare for $98 per share for a total of $9.6 billion and assumed long-term debt with a fair value of approximately $3.1 billion. Additionally, holders of Omnicare restricted stock units and performance based restricted stock units received 738,765 CVS Health restricted stock awards with a fair value of approximately $80 million as replacement awards. According to CVS Health's SEC filings, the Company acquired Omnicare to expand its operations in dispensing prescription drugs to assisted-living and long-term care facilities, and to broaden its presence in the specialty pharmacy business as it sought to serve a greater percentage of the growing senior patient population in the United States.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) CVS Health's financial condition and expected earnings were deteriorating as a result of rising costs and poor results associated with the Omnicare Acquisition; and (ii) as a result, CVS Health's public statements were materially false and misleading at all relevant times.
On February 20, 2019, CVS Health announced the Company's fourth quarter and full year financial and operating results and provided 2019 full year guidance. CVS Health advised investors that adjusted earnings in 2019 would be $6.68 to $6.88 per share, compared with the $7.36 average of market estimates, citing rising costs and poor results related to the Company's 2015 acquisition of Omnicare.
Following this news, CVS Health's stock price fell by $5.66 per share, or slightly over 8%, to close at $64.22 per share on February 20, 2019.