Last Wednesday, AmerisourceBergen announced plans to purchase hospital product supplier PharMEDium for $2.58 billion. This news caused the company’s shares to drop by 0.3 percent to $92.75 by mid-morning trading that day. However, AmerisourceBergen, the Chesterbrook based pharmaceutical company, sees the move in a much positive light.

During the announcement of the planned purchase of PharMEDium, the national leader in customized pharmacy sterile compounding for hospital intravenous and epidural therapies, AmerisourceBergen pointed out that it would add anywhere between 22 cents and 26 cents to its adjusted earnings per share in 2016. In addition, it is expected that the acquisition will cut costs by around $30 million annually by 2018.

“The acquisition of PharMEDium strengthens our core business and meaningfully expands our innovative service offerings for health systems,” said Steven H. Collis, AmerisourceBergen President and Chief Executive Officer. “PharMEDium’s impressive track record of growth and proven ability to consistently deliver high quality CSPs in key therapeutic areas make them the undisputed leader in an important growth area of the U.S. healthcare market.”

AmerisourceBergen purchased PharMEDium from private equity firm Clayton, Dubilier & Rice which acquired the company in 2014 for a price rumored to be around $900 million. This marks AmerisourceBergen’s second major acquisition this year, following the purchase of MWI Veterinary for $2.5 billion at the beginning of the year in an effort to expand into animal health.

These positive strategic moves have prompted TheStreet ratings team to give AmerisourceBergen a ratings score of B indicating a Buy.

When discussing the recommendation, The Street said that “the recommendation is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company’s strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance, increase in net income and growth in earnings per share.”