Canaccord, while disappointed with merger terms, remains buyer of BioScrip

Canaccord Genuity analyst Richard Close lowered his price target for BioScrip to $3.50 from $5.00 while reiterating a Buy rating on the shares. While disappointed with the terms of the Option Care merger agreement as BioScrip shareholders are just 20% shareholders post-transaction, the analyst says he understands the rationale for the merger. The need for scale in healthcare is “increasingly paramount as the provider and payer markets consolidate and reimbursement risk is always present,” Close tells investors in a research note titled “Merger: short-term pain but long-term.” Longer-term scale matters and the transaction provides an improved capital structure, says the analyst. He remains a buyer of BioScrip shares.

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