UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant ☒       Filed by a Party other than the Registrant  o

Check the appropriate box:

PharMerica Corporation
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

PHARMERICA CORPORATION
1901 Campus Place
Louisville, Kentucky 40299

October 3, 2017

Dear Stockholder:

You are cordially invited to attend a special meeting of the stockholders of PharMerica Corporation, a Delaware corporation (the “Company”), which we will hold at the Louisville Marriott Downtown, 280 West Jefferson Street, Louisville, KY 40202, on November 9, 2017, at 9:00 a.m. local time.

At the special meeting, holders of our common stock, par value $0.01 per share (“common stock”), will be asked to consider and vote on a proposal to adopt an Agreement and Plan of Merger (as it may be amended from time to time, the “merger agreement”), dated as of August 1, 2017, by and among the Company, Phoenix Parent Holdings Inc., a Delaware corporation (“Parent”), and Phoenix Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”). Under the merger agreement, Merger Sub will be merged with and into the Company (the “merger”), and each share of common stock outstanding immediately prior to the effective time of the merger (other than certain shares as set forth in the merger agreement) will be converted into the right to receive an amount in cash equal to $29.25 per share (such amount, the “merger consideration”) without interest and subject to any required tax withholding. If the merger is completed, the Company will become a subsidiary of Parent, an entity which is an affiliate of investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”) and, at the closing of the merger, Walgreens Boots Alliance, Inc. (“WBA”) will acquire a minority ownership interest in Parent.

The board of directors of the Company (the “board”) unanimously (i) determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of the Company and its stockholders, (ii) approved, adopted and authorized the merger agreement and the transactions contemplated thereby, and (iii) resolved to recommend, subject to the provisions of the merger agreement, the adoption of the merger agreement, including the merger, by the stockholders of the Company and directed that such matter be submitted for consideration of the stockholders of the Company at the special meeting.

The board unanimously recommends that the stockholders of the Company vote “FOR” the proposal to adopt the merger agreement.

At the special meeting, stockholders will also be asked to vote on (i) an advisory (non-binding) proposal to approve specified compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and (ii) a proposal to approve the adjournment of the special meeting from time to time, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement. The board unanimously recommends that the stockholders of the Company vote “FOR” each of these proposals.

The enclosed proxy statement describes the merger agreement, the merger and related agreements and provides specific information concerning the special meeting. In addition, you may obtain information about us from documents filed with the Securities and Exchange Commission (the “SEC”). We urge you to, and you should, read the entire proxy statement carefully, including the annexes and the documents referred to or incorporated by reference in the proxy statement, as it sets forth the details of the merger agreement and other important information related to the merger.

Your vote is very important. The merger cannot be completed unless holders of a majority of the outstanding shares of common stock vote in favor of the adoption of the merger agreement. If you fail to vote on the adoption of the merger agreement, the effect will be the same as a vote against the adoption of the merger agreement.

While stockholders may exercise their right to vote their shares of common stock in person, we recognize that many stockholders may not be able to attend the special meeting. Accordingly, we have enclosed a proxy card that will enable your shares of common stock to be voted on the matters to be considered at the special meeting even if you are unable to attend. If you desire your shares of common stock to be voted in accordance with the board’s recommendation, you need only sign, date and return the proxy card in the enclosed postage-paid envelope. Otherwise, please mark the proxy to indicate your voting instructions; date and sign the proxy card; and return it in the enclosed postage-paid envelope. You also may submit a proxy by using a toll-free telephone number or the Internet. We have provided instructions on the proxy card for using these convenient services. Submitting a proxy will not prevent you from voting your shares of common stock in person if you subsequently choose to attend the special meeting. Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy card and thus ensure that your shares of common stock will be represented at the special meeting if you are unable to attend.

If you hold your shares of common stock in “street name” through a broker, bank or other nominee you should follow the directions provided by your broker, bank or other nominee regarding how to instruct your broker, bank or other nominee to vote your shares of common stock. Without those instructions, your shares of common stock will not be voted, which will have the same effect as voting against the proposal to adopt the merger agreement.

If you have any questions or need assistance in voting your shares of common stock, please contact our proxy solicitor, Mackenzie Partners, Inc., toll free at 800-322-2885.

On behalf of the Board of Directors of
PharMerica Corporation,

GREGORY S. WEISHAR
Chief Executive Officer

Louisville, Kentucky
October 3, 2017

Neither the SEC nor any state securities commission has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

This proxy statement is dated October 3, 2017 and is first being mailed to stockholders on or about October 3, 2017.

PHARMERICA CORPORATION
1901 Campus Place
Louisville, Kentucky 40299

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To the Stockholders of PharMerica Corporation:

NOTICE IS HEREBY GIVEN that a Special Meeting of the Stockholders of PharMerica Corporation, a Delaware corporation (“PharMerica,” the “Company” or “we”), will be held at the Louisville Marriott Downtown, 280 West Jefferson Street, Louisville, KY 40202, at 9:00 a.m. local time on November 9, 2017, for the following purposes:

The holders of record of our common stock, par value $0.01 per share (“common stock”), at the close of business on September 28, 2017, are entitled to receive notice of, and to vote at, the special meeting or at any adjournment thereof. All stockholders are cordially invited to attend the special meeting in person.

The board of directors of the Company (the “board”) unanimously (i) determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of the Company and its stockholders, (ii) approved, adopted and authorized the merger agreement and the transactions contemplated thereby, and (iii) resolved to recommend, subject to the provisions of the merger agreement, the adoption of the merger agreement, including the merger, by the stockholders of the Company and directed that such matter be submitted for consideration of the stockholders of the Company at the special meeting.

The board unanimously recommends that the stockholders of the Company vote “FOR” the proposal to adopt the merger agreement, “FOR” the advisory (non-binding) proposal to approve specified compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and “FOR” the proposal to adjourn the special meeting from time to time, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Your vote is important, regardless of the number of shares of common stock you own. The adoption of the merger agreement by the affirmative vote of holders of a majority of the outstanding shares of common stock as of the record date is a condition to the consummation of the merger. The advisory (non-binding) proposal to approve specified compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and the proposal to adjourn the special meeting from time to time, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement each requires the affirmative vote of holders of a majority of the shares of common stock present in person or represented by proxy at the meeting and entitled to vote thereon. Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy card and thus ensure that your shares of common stock will be represented at the special meeting if you are unable to attend. A failure to vote your shares of common stock or an abstention from voting will have the same effect as a vote against the proposal to adopt the merger agreement.

You also may submit your proxy by using a toll-free telephone number or the Internet. We have provided instructions on the proxy card for using these convenient services.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of the proposal to adopt the merger agreement, the advisory (non-binding) proposal to approve specified compensation that may be paid or become payable to the named executive officers of the Company in connection with the merger and the proposal to adjourn the special meeting from time to time, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement. If you fail to vote or submit your proxy, the effect will be that your shares of common stock will not be counted for purposes of determining whether a

quorum is present at the special meeting and will have the same effect as a vote against the adoption of the merger agreement, but will not affect the advisory vote to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and the vote regarding the adjournment of the special meeting to solicit additional proxies, if necessary or appropriate.

Your proxy may be revoked at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

On behalf of the Board of Directors of
PharMerica Corporation,

GREGORY S. WEISHAR
Chief Executive Officer
Louisville, Kentucky
October 3, 2017

TABLE OF CONTENTS

Annex

SUMMARY

This summary discusses material information contained in this proxy statement, including with respect to the merger agreement, the merger and the other agreements entered into in connection with the merger. We encourage you to read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement, as well as any amendments thereto or other related documents filed with the SEC, as this Summary may not contain all of the information that may be important to you. The items in this Summary include page references directing you to a more complete description of that topic in this proxy statement.

Unless stated otherwise or the context otherwise requires, in this proxy statement, all references to:

The Parties to the Merger Agreement

PharMerica Corporation

PharMerica Corporation is a Delaware corporation. PharMerica is a national provider of institutional pharmacy, specialty infusion and hospital pharmacy management services. PharMerica’s common stock is listed on the New York Stock Exchange, referred to as the “NYSE,” under the symbol “PMC”. See “The Parties to the Merger Agreement—PharMerica Corporation” beginning on page 18 of this proxy statement.

Additional information about PharMerica is contained in our public filings with the SEC that are incorporated by reference herein. See “Where You Can Find Additional Information” beginning on page 96 of this proxy statement.

Phoenix Parent Holdings Inc. and Phoenix Merger Sub Inc.

Phoenix Parent Holdings Inc. is a Delaware corporation. Phoenix Merger Sub Inc. is a Delaware corporation and a wholly owned subsidiary of Parent. Parent and Merger Sub are affiliates of investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”) and, at the closing of the merger, an affiliate of Walgreens Boots Alliance, Inc. (“WBA”) will acquire a minority ownership interest in Parent. Both Parent and Merger Sub were formed solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement, and have not engaged in any business except for activities incidental to their formation and as contemplated by the merger agreement. See “The Parties to the Merger Agreement—Phoenix Parent Holdings Inc. and Phoenix Merger Sub Inc.” beginning on page 18 of this proxy statement.

The Special Meeting

The special meeting of the stockholders of the Company will be held at the Louisville Marriott Downtown, 280 West Jefferson Street, Louisville, KY 40202, on November 9, 2017, at 9:00 a.m. local time (the “special meeting”).

Proposals to Be Voted on at the Special Meeting

At the special meeting, you will be asked to consider and vote upon the following proposals:

Effect of Merger

The merger agreement provides that at the effective time of the merger each outstanding share of common stock (other than shares of common stock held by the Company as treasury stock (other than shares in a Company Plan (as defined in the merger agreement)), any subsidiary of the Company, Parent, any subsidiary of Parent (including Merger Sub) and holders who are entitled to and properly exercise appraisal rights under Delaware law) (collectively, the “excluded shares”)), will be converted into the right to receive an amount in cash equal to $29.25 per share (the “merger consideration”). Following the merger, the Company will become a privately held company, wholly owned by Parent, and the Company’s common stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Parent is an affiliate of investment funds affiliated with KKR and, at the closing of the transactions contemplated by the merger agreement, affiliates of WBA will acquire a minority ownership interest in Parent.

Record Date, Stockholders Entitled to Vote and Quorum

Only holders of record of the shares of common stock as of the close of business on September 28, 2017 (the “record date”), will be entitled to receive notice of, and to vote at, the special meeting or any adjournments thereof. As of the record date, there were 31,118,927 shares of common stock outstanding.

Holders of common stock are entitled to one vote on each matter submitted to a vote for each share of common stock owned at the close of business on the record date.

A majority of the shares of common stock entitled to vote at the special meeting, represented in person or by proxy, constitutes a quorum for the transaction of business at the special meeting. Proxies received but marked as abstentions of common stock will be included in the calculation of the number of shares of common stock considered to be present at the special meeting in determining a quorum. There will be no broker non-votes at the special meeting, as described below under the heading “—Required Vote”. Under our amended and restated by-laws (“by-laws”), in the absence of a quorum at the special meeting, the meeting of stockholders may be adjourned by the Chairman of the board or, in the event of his or her absence or disability, a presiding officer chosen by the board.

Required Vote

For the Company to complete the merger, under Delaware law, stockholders holding at least a majority of the shares of common stock outstanding and entitled to vote thereon must vote “FOR” the merger proposal. In addition, under the merger agreement, the receipt of such required vote is a condition to the consummation of the merger. A failure to vote your shares of common stock, an abstention from voting or the failure, with respect of shares of common stock held in “street name” through a broker, bank or other nominee, to give voting instructions to such broker, bank or other nominee, will have the same effect as a vote against the merger proposal.

The compensation proposal and the adjournment proposal each requires the affirmative vote of holders of a majority of the shares of common stock present in person or represented by proxy at the meeting and entitled to vote thereon. Accordingly, not voting at the special meeting will have no effect on the outcome of these proposals, but abstentions will have the effect of a vote against these proposals.

Under NYSE rules, brokers, banks or other nominees who hold shares of common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals

when they have not received instructions from beneficial owners. However, brokers, banks or other nominees are not allowed to exercise their voting discretion with respect to the approval of matters that are “non-routine” without specific instructions from the beneficial owner. All proposals to be voted on by you at the special meeting are “non-routine” matters, and therefore brokers do not have discretionary authority to vote on any of the proposals. Broker non-votes occur when a broker, bank or other nominee is not instructed by the beneficial owner of shares of common stock to vote on a particular proposal for which the broker does not have discretionary voting power. Accordingly, there can be no broker non-votes at the special meeting, so failure to provide instructions to your broker or other nominee on how to vote will result in your shares of common stock not being counted as present at the meeting.

Voting by the Company’s Directors and Executive Officers

At the close of business on the record date for the special meeting, the Company’s directors and executive officers and their affiliates beneficially owned and had the right to vote 1,452,742 shares of common stock at the special meeting, which represents approximately 4.67% of the shares of common stock entitled to vote at the special meeting.

It is expected that the Company’s directors and executive officers and their affiliates will vote their shares of common stock:

Conditions to Completion of the Merger

The obligations of the Company, Parent and Merger Sub to complete the merger are subject to the satisfaction or waiver of the following conditions:

The obligations of Parent and Merger Sub to complete the merger are subject to the satisfaction (or waiver by Parent) of the following additional conditions, among others:

The obligations of the Company to complete the merger are subject to the satisfaction (or waiver by the Company) of the following additional conditions, among others:

When the Merger Becomes Effective

We anticipate completing the merger by early 2018, subject to the adoption of the merger agreement by the Company’s stockholders as specified herein and the satisfaction of the other closing conditions (and completion of the marketing period) as described in the section entitled “Conditions to Completion of the Merger” beginning on page 79 of this proxy statement.

Recommendation of the Company’s Board of Directors

The board unanimously (i) determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of the Company and its stockholders, (ii) approved, adopted and authorized the merger agreement and the transactions contemplated thereby, and (iii) resolved to recommend, subject to the provisions of the merger agreement, the adoption of the merger agreement, including the merger, by the stockholders of the Company and directed that such matter be submitted for consideration of the stockholders of the Company at the special meeting. The board unanimously recommends that the stockholders of the Company vote “FOR” the merger proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal. For a description of the reasons considered by the board in deciding to recommend approval of the merger proposal, see “The Merger (Proposal 1)—Reasons for the Merger” beginning on page 31 of this proxy statement.

Opinions of the Company’s Financial Advisors

Opinion of UBS

On August 1, 2017, at a meeting of the board held to evaluate the merger and the merger agreement and the transactions contemplated thereby, PharMerica’s financial advisor, UBS Securities LLC (“UBS”), delivered to the board an oral opinion, which opinion was subsequently confirmed by delivery of a written opinion, dated August 1, 2017, to the effect that, as of that date and based on and subject to various assumptions made, matters considered, and qualifications and limitations described in its written opinion, the merger consideration to be received by the holders of common stock (other than Parent, Merger Sub and their affiliates) in the merger was fair, from a financial point of view, to such holders.

The full text of UBS’s opinion to the board describes the assumptions made, procedures followed, matters considered, and qualifications and limitations on the review undertaken by UBS. The opinion is attached to this proxy statement as Annex B and is incorporated into this proxy statement by reference. The summary of UBS’s opinion in this proxy statement is qualified in its entirety by reference to the full text of UBS’s written opinion. Holders of common stock are encouraged to read UBS’s opinion carefully in its entirety. UBS’s opinion was provided for the benefit of PharMerica’s board (in its capacity as such) in connection with, and for the purpose of, its evaluation of the merger consideration to be received by the holders of common stock (other than Parent, Merger Sub and their affiliates) in the merger from a financial point of view, and does not address any other aspect of the merger or any related transaction. UBS’s opinion does not address the relative merits of the merger or any related transaction as compared to other business strategies or transactions that might be available with respect to PharMerica or PharMerica’s underlying business decision to effect the merger or any related transaction. UBS’s opinion does not constitute a recommendation to any stockholder of PharMerica as to how such stockholder should vote or act with respect to the merger or any related transaction.

Opinion of BofA Merrill Lynch

In connection with the merger, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofA Merrill Lynch”), the Company’s financial advisor, delivered to the board a written opinion, dated August 1, 2017, as to the fairness, from a financial point of view and as of the date of the opinion, of the merger consideration to be received in the merger by holders of shares of common stock. The full text of the written opinion, dated August 1, 2017, of BofA Merrill Lynch, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex C to this document and is incorporated by reference herein in its entirety. BofA Merrill Lynch provided its opinion to the board (in its capacity as such) for the benefit and use of the board in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to the Company or in which the

Company might engage or as to the underlying business decision of the Company to proceed with or effect the merger. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and does not constitute a recommendation to any stockholder as to how to vote or act in connection with the proposed merger or any other matter.

Treatment of Company Stock Options and Company RSU Awards

Under the merger agreement, equity-based awards held by the Company’s directors and executive officers as of the effective time of the merger will be treated at the effective time of the merger as follows:

Company Stock Options. Except as otherwise agreed between Parent and any holder, each option to purchase shares of common stock granted under any employee or director plan (the “Company Plan”) outstanding immediately prior to the effective time, whether vested or unvested, will become fully vested and exercisable as of immediately prior to the effective time and will be cancelled in exchange for the right to receive a cash payment, subject to any required tax withholding, equal to the product of (i) the excess, if any, of the merger consideration over the applicable per share exercise price of such option multiplied by (ii) the number of shares of common stock subject to such option.

Company RSU Awards. Except as otherwise agreed between Parent and any holder, each restricted stock unit which has not vested or will not vest as of or prior to the effective time will, at the effective time, be cancelled and in substitution thereof, such holder will be eligible to receive a cash payment, subject to any required tax withholding, equal to the product of (i) the merger consideration multiplied by (ii) the number of shares of common stock subject to such unvested company stock unit (the “RSU Payment”). The RSU Payment will initially be unvested and will vest, subject to continued employment or service, based on the same vesting schedule applicable to such cancelled restricted stock unit, subject to any applicable vesting upon a termination of the holder’s employment under the applicable Company Plan and award agreement that relates to the original restricted stock unit. Restricted stock units held by certain employees may become vested in connection with the merger and, in some cases, upon a qualifying termination of employment, pursuant to applicable award agreements or employment agreements or other contractual arrangements with the Company. The agreements with the named executive officers are described under the section entitled “Interests of the Company’s Directors and Executive Officers in the Merger – Change in Control and Severance Arrangements” beginning on page 55 of this proxy statement.

Company PSU Awards. Except as otherwise agreed between Parent and the holder thereof, each performance stock unit which has not vested or will not vest as of or prior to the effective time will, at the effective time, be cancelled and in substitution thereof, such holder will be eligible to receive a cash payment, subject to any required tax withholding, equal to the product of (i) the merger consideration multiplied by (ii) the number of shares of common stock subject to such unvested performance stock unit, calculated assuming target performance levels (the “PSU Payment”). The PSU Payment will initially be unvested and will vest, subject to continued employment or service, on the last day of the performance period applicable to such cancelled performance stock unit, subject to any applicable vesting upon a termination of the holder’s employment under the applicable Company Plan and award agreement that relates to the original performance stock unit. Performance stock units held by certain employees may become vested in connection with the merger and, in some cases, upon a qualifying termination of employment, pursuant to applicable award agreements or employment agreements or other contractual arrangements with the Company. The agreements with the named executive officers are described under the section entitled “Interests of the Company’s Directors and Executive Officers in the Merger – Change in Control and Severance Arrangements” beginning on page 55 of this proxy statement.

Additional Interests of the Company’s Directors and Executive Officers in the Merger

In considering the recommendation of the board with respect to the merger proposal, you should be aware that some of the Company’s directors and executive officers may have interests in the merger and the other transactions contemplated by the merger agreement that are different from, or in addition to, the interests of the Company’s stockholders generally. Interests of officers and directors that may be different from or in addition to the interests of the Company’s stockholders include, among others:

These interests are discussed in more detail in the section entitled “The Merger (Proposal 1)—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 54 of this proxy statement. The board was aware of the different or additional interests set forth herein and considered such interests along with other matters in approving the merger agreement and the transactions contemplated thereby, including the merger.

Financing

The Company and Parent anticipate that the total amount of funds required to complete the merger and the related transactions and pay related fees and expenses will be funded through a combination of the following:

The consummation of the merger is not subject to any financing-related condition (although the funding of the debt financing is subject to the satisfaction of the conditions set forth in the debt commitment letter under which the debt financing will be provided).

Limited Guarantees

Subject to the terms and conditions set forth in limited guarantees in favor of the Company from each of KKR Americas XII and WBA (the “limited guarantees”), dated August 1, 2017 and executed concurrently with the execution of the merger agreement, KKR Americas XII and WBA have guaranteed the payment obligations of Parent with respect to the following:

Material U.S. Federal Income Tax Consequences of the Merger

In general, the merger will be a taxable transaction for holders of shares of common stock. For U.S. federal income tax purposes, if you are a U.S. holder (as defined in “The Merger (Proposal 1)—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 60 of this proxy statement) you will generally

recognize gain or loss measured by the difference, if any, between the cash you receive (before reduction for any applicable withholding tax) in the merger and your tax basis in the shares of common stock exchanged in the merger. Gain or loss will be determined separately for each block of your shares of common stock (i.e., shares acquired at the same cost in a single transaction). You should consult your own tax advisor about the tax consequences to you of the merger in light of your particular circumstances.

Regulatory Approvals

Under the HSR Act and related rules, certain transactions, including the merger, may not be completed until notifications have been given and information furnished to the Antitrust Division of the United States Department of Justice (“Antitrust Division”) and the Federal Trade Commission (“FTC”) and all statutory waiting period requirements have been satisfied or early termination has been granted by the applicable agencies. On August 15, 2017, both the Company and Parent filed their respective Notification and Report Forms with the Antitrust Division and the FTC. Early termination of the HSR waiting period was received on August 25, 2017.

Under the merger agreement, the parties’ obligations to complete the merger are conditional on the receipt of all antitrust approvals required by the laws of Bosnia, China, the European Union and Turkey. To date, the parties have submitted merger notification filings in Bosnia, China, the European Union and Turkey. On September 28, 2017, the merger was granted clearance in Turkey.

Antitrust Support Side Letter

In connection with the merger agreement, the Company, KKR Americas XII and WBA have entered into an Antitrust Support Side Letter (the “antitrust support side letter”) pursuant to which KKR Americas XII and WBA have agreed to use reasonable best efforts to take all actions necessary to enable Parent to comply with certain of its obligations under the merger agreement, including obtaining regulatory approvals necessary to consummate the transactions contemplated by the merger agreement, subject to certain exceptions, including the limitation that KKR, WBA and their respective affiliates (including KKR Americas XII and any other investment funds or investment vehicles affiliated with, or managed or advised by, KKR or any portfolio company or investment of KKR or of any such investment fund or investment vehicle, other than Parent and its subsidiaries) will have no obligation to agree to or otherwise effect any divestiture, hold separate arrangement, change to its assets or business, litigation or any other action to obtain antitrust or competition approvals, and Parent will have no obligation to cause WBA, KKR or such affiliates to take any such actions. In addition, each of WBA, WBA’s affiliates (excluding Parent and Merger Sub, whose obligations are governed by the merger agreement) and KKR Americas XII will use reasonable best efforts not to undertake, announce or enter into certain transactions that involve any (A) long term care pharmacy or (B) business that provides home infusion therapy services to patients, if, in the case of (A) or (B), any of such transactions would be reasonably expected to result in any material impediment or material delay in obtaining applicable clearances required under any applicable antitrust laws; provided that nothing in the antitrust support side letter or merger agreement will in any way restrict the activities of KKR or any of its affiliates (excluding KKR Americas XII but including any other investment funds or investment vehicles affiliated with, or managed or advised by, KKR or any portfolio company or investment of KKR or of KKR Americas XII or any such other investment fund or investment vehicle). A copy of the antitrust support side letter is attached to this proxy statement as Annex D.

Litigation Relating to the Merger

As of the date of this proxy statement, two putative securities class action lawsuits related to the proposed merger have been filed by purported stockholders of PharMerica. These lawsuits, captioned Martin v. PharMerica Corp., et al. (Case No. 1:17-cv-01301) (the “Martin Action”) and Berg v. PharMerica Corp., et al. (Case No. 3:17-CV-582-DJH) (the “Berg Action” and, together with the Martin Action, the “Actions”), were filed in the United States District Court for the District of Delaware on September 13, 2017 and in the United States District Court for the Western District of Kentucky on September 20, 2017, respectively. The Actions name as defendants PharMerica, the members of the PharMerica board of directors and, in the case of the Berg Action, Parent and Merger Sub. The Actions generally allege, among other things, that the individual director defendants caused PharMerica to file a materially incomplete and misleading proxy statement relating to the proposed merger in violation of Sections 14(a) and 20(a) of the Exchange Act. The Martin Action seeks, among other relief, to enjoin the defendants from proceeding with the stockholder vote on the proposed merger or consummating the proposed merger, and in the event the merger is consummated, to recover damages in an

unspecified amount. The Berg Action seeks, among other relief, to enjoin the defendants from proceeding with or consummating the proposed merger or, in the event that the proposed merger is consummated, an order rescinding the merger and awarding rescissory damages. The Actions also seek an unspecified award of attorneys’ and expert fees and expenses. PharMerica believes that the Actions are without merit and intends to defend vigorously against all claims asserted.

No Solicitation

Under the merger agreement, the Company and its affiliates and their respective representatives may not:

But if, prior to obtaining the stockholder approval (defined in the section entitled “Conditions to Completion of the Merger” beginning on page 79 of this proxy statement), the Company receives a bona fide alternative proposal from a third party that the Board determines in good faith, after consultation with outside legal counsel and financial advisors, is, or is reasonably likely to lead to, a “superior proposal” (defined below in the section entitled “The Merger Agreement – No Solicitation” beginning on page 70 of this proxy statement), then the Company may take the following actions:

In order for the board to change its recommendation in response to a superior proposal or for the Company to terminate the merger agreement to accept a superior proposal, the Company must (among other obligations):

Following the end of such three business day period (and any such additional periods), after taking into account any revisions to the terms and conditions of the merger agreement proposed by Parent, the board must determine in good faith, after consultation with its outside legal counsel and financial advisors, that such third-party acquisition proposal continues to constitute a superior proposal and that failure to take such action would be inconsistent with its duties under applicable law. If the Company terminates the merger agreement to enter into an agreement with a third party regarding a superior proposal or the board changes its recommendation in response to a superior proposal and the agreement is terminated by Parent, then the Company must pay a termination fee of $33 million to Parent (as described in more detail under the section entitled “The Merger Agreement—Termination Fees—Company Termination Fee” beginning on page 82 of this proxy statement).

Termination

The Company and Parent may terminate the merger agreement by mutual written consent at any time before the Effective Time of the merger. In addition, either the Company or Parent may terminate the merger agreement if:

Parent may terminate the merger agreement if:

The Company may terminate the merger agreement if:

Termination Fees

Upon termination of the merger agreement, under certain specified circumstances, the Company may be required to pay a termination fee of $33 million to Parent pursuant to the terms and conditions of the merger agreement. Upon termination of the merger agreement, under certain specified circumstances, Parent may be required to pay the Company a reverse termination fee of either $56.6 million or $133.3 million pursuant to the terms and conditions of the merger agreement. See the section entitled “The Merger Agreement—Termination Fees” beginning on page 82 of this proxy statement for a discussion of the circumstances under which either party will be required to pay a termination fee.

Expenses

Except as otherwise provided in the merger agreement, all costs and expenses incurred in connection with the merger agreement will be paid by the party incurring such cost or expense.

Rights of Appraisal

Under Delaware law, holders of shares of our common stock who do not vote in favor of the adoption of the merger agreement, who properly demand appraisal of their shares of common stock and who otherwise comply with all the requirements of Section 262 of the General Corporation Law of the State of Delaware, referred to as the “DGCL,” will be entitled to seek appraisal for, and obtain payment in cash for the judicially determined fair value of, their shares of common stock in lieu of receiving the merger consideration if the merger is completed. This value could be more than, the same as, or less than the merger consideration. Any holder of shares of common stock intending to exercise appraisal rights, among other things, must submit a written demand for appraisal to us prior to the vote on the proposal to adopt the merger agreement and must not vote in favor of the proposal to adopt the merger agreement and must otherwise strictly comply with all of the procedures required by Delaware law. The relevant provisions of the DGCL are included as Annex E to this proxy statement. You are encouraged to read these provisions carefully and in their entirety. If you hold your shares of common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by such bank, brokerage firm or nominee. Moreover, due to the complexity of the procedures for exercising the right to seek appraisal, stockholders who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to strictly comply with these provisions will result in the loss of the right of appraisal.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the special meeting, the merger agreement and the merger. These questions and answers may not address all questions that may be important to you as a stockholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, as well as any amendments thereto or other related documents filed with the SEC.

As of September 28, 2017, the record date for the special meeting, the directors and current executive officers owned, in the aggregate, 4.67% of the outstanding shares of common stock of the Company entitled to vote at the special meeting.

If you hold the shares of common stock in your own name and submit a proxy but fail to provide voting instructions or abstain on any of the proposals listed on the proxy card, your shares will be counted for purpose of determining whether a quorum is present at the special meeting.

If your shares are held in “street name” by your broker, bank or other nominee and you do not tell the nominee how to vote your shares, these shares will not be counted for purposes of determining whether a quorum is present for the transaction of business at the special meeting.

result of the merger, the Company will cease to be a publicly traded company and will be wholly owned by Parent. Following the consummation of the merger, the registration of shares of our common stock and our reporting obligations under the Exchange Act will be terminated. In addition, upon the consummation of the merger, shares of our common stock will no longer be listed on any stock exchange or quotation system, including the NYSE.

If you intend to submit your proxy by telephone or over the Internet, you must do so by 11:59 P.M. Eastern Daylight Time on the day before the special meeting. If you intend to submit your proxy by mail, your completed proxy card must be received prior to the special meeting.

If you hold your shares in “street name” through a broker, bank or other nominee you should follow the directions provided by your broker, bank or other nominee regarding how to instruct your broker, bank or other nominee to vote your shares. Without those instructions, your shares will not be voted, which will have the same effect as voting “AGAINST” the merger proposal. Even if you plan to attend the special

meeting, to ensure that your shares of common stock are voted, please submit a proxy to vote your shares of common stock by marking, signing, dating and returning the enclosed proxy card or by using the telephone number printed on your proxy card or by using the Internet voting instructions printed on your proxy card.

Please note that if you hold your shares of common stock in “street name” and you have instructed a broker, bank or other nominee to vote your shares, the above-described options for revoking your voting instructions do not apply, and instead you must follow the instructions received from your broker, bank or other nominee to revoke your voting instructions.

The record date for stockholders entitled to vote at the special meeting is earlier than the date on which the merger will be consummated. So, if you transfer your shares of common stock after the record date but before the special meeting, you will have transferred your right to receive the merger consideration in the merger, but retained the right to vote at the special meeting.

award will be subject to the same terms and conditions as applied to the original restricted stock unit or performance stock unit and will vest based on (x) continued employment or service in accordance with the original vesting schedule, in the case of cash awards converted from restricted stock units, and (y) continued employment or service on the last day of the performance period applicable to the cancelled performance stock unit, in the case of performance stock units.

If your broker, bank or other nominee holds your shares of common stock in “street name,” you should also call your broker, bank or other nominee for additional information.

MacKenzie Partners, Inc., the Company’s proxy solicitor, may be contacted at:

MacKenzie Partners, Inc.
105 Madison Avenue
New York, New York 10016
Toll Free: (800) 322-2885
or
Call Collect: (212) 929-5500
Email: proxy@mackenziepartners.com

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents incorporated by reference in this proxy statement, include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which are identified by the use of the words “believe,” “expect,” “may,” “could,” “should,” “plan,” “project,” “anticipate,” “intend,” “estimate,” “will,” “contemplate,” “would” and similar expressions that contemplate future events. Such forward-looking statements are based on management’s reasonable current assumptions and expectations, including the expected completion and timing of the merger and other information relating to the merger. You should be aware that forward-looking statements involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that the actual results or developments we anticipate will be realized, or even if realized, that they will have the expected effects on the business or operations of the Company. These forward-looking statements speak only as of the date on which the statements were made and we undertake no obligation to update or revise any forward-looking statements made in this proxy statement or elsewhere as a result of new information, future events or otherwise, except as required by law. In addition to other factors and matters contained in or incorporated by reference in this document, we believe the following factors could cause actual results to differ materially from those discussed in the forward-looking statements:

Many of the factors that will determine our future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers of this proxy statement should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We cannot guarantee any future results, levels of activity, performance or achievements.

THE PARTIES TO THE MERGER AGREEMENT

PharMerica Corporation

PharMerica Corporation is a Delaware corporation with principal executive offices located at 1901 Campus Place, Louisville, Kentucky 40299. The Company is an institutional pharmacy services company that services healthcare facilities, provides pharmacy management services to hospitals, provides specialty infusion services to patients outside a hospital setting, and offers the only national oncology pharmacy in the United States. The Company’s customers are typically institutional healthcare providers, such as skilled nursing facilities, assisted living facilities, hospitals, individuals receiving in-home care and patients with cancer. PharMerica’s common stock is currently listed on the NYSE under the symbol “PMC”. A detailed description of the Company’s business is contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which is incorporated by reference into this proxy statement. See “Where You Can Find Additional Information” beginning on page 96 of this proxy statement.

Phoenix Parent Holdings Inc. and Phoenix Merger Sub Inc.

Phoenix Parent Holdings Inc. is a Delaware corporation. Phoenix Merger Sub Inc. is a Delaware corporation and a wholly owned subsidiary of Parent. Parent and Merger Sub are affiliates of investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P. and at the closing of the transactions contemplated by the merger agreement, an affiliate of WBA will acquire a minority ownership interest in Parent. The principal executive offices of both Parent and Merger Sub are located at 2800 Sand Hill Road, Suite 200, Menlo Park, CA 94025. Both Parent and Merger Sub were formed solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement, and have not engaged in any business except for activities incidental to their formation and as contemplated by the merger agreement.

THE SPECIAL MEETING

We are furnishing this proxy statement to the Company’s stockholders as part of the solicitation of proxies by the board for use at the special meeting. This proxy statement provides the Company’s stockholders with the information they need to know to be able to vote or instruct their vote to be cast at the special meeting or any adjournment or postponement thereof.

Date, Time and Place of the Special Meeting

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the board for use at the special meeting to be held on November 9, 2017, starting at 9:00 a.m. local time at the Louisville Marriott Downtown, 280 West Jefferson Street, Louisville, KY 40202, or at any adjournment or postponement thereof.

Purpose of the Special Meeting

The purpose of the special meeting is for our stockholders to consider and vote upon the merger proposal. Our stockholders must adopt the merger agreement for the merger to occur. If our stockholders fail to adopt the merger agreement, the merger will not occur. A copy of the merger agreement is attached to this proxy statement as Annex A and the material provisions of the merger agreement are described under the section entitled “The Merger Agreement” beginning on page 64 of this proxy statement. Our stockholders are also being asked to approve the proposal to adjourn the special meeting from time to time, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

In addition, in accordance with Section 14A of the Exchange Act, the Company is providing its stockholders with the opportunity to cast an advisory (non-binding) vote on the compensation that may be paid or become payable to its named executive officers in connection with the merger, the value of which is disclosed in the table in the section entitled “The Merger (Proposal 1)—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 54 of this proxy statement. The vote on the compensation proposal is a vote separate and apart from the vote to approve the merger. Accordingly, a stockholder may vote to approve the executive compensation and vote not to adopt the merger and vice versa. Because the vote is advisory in nature only, it will not be binding on either the Company or Parent. Accordingly, because the Company is contractually obligated to pay the compensation, the compensation will be payable, subject only to the conditions applicable thereto, if the merger is approved and regardless of the outcome of the advisory vote on the compensation proposal.

This proxy statement and the enclosed form of proxy card are first being mailed to our stockholders on or about October 3, 2017.

Recommendation of the Company’s Board of Directors

After careful consideration, the board has unanimously (i) determined that the merger agreement and transactions contemplated thereby are fair to and in the best interests of the Company’s stockholders, (ii) approved, adopted and declared advisable the merger agreement and the transactions contemplated thereby, and (iii) resolved, subject to the provisions of the merger agreement, to recommend the acceptance of the merger agreement, including the merger, by the stockholders of the Company at the special meeting. Certain factors considered by the board in reaching its decision to approve the merger agreement and approve the merger can be found in the section entitled “The Merger (Proposal 1)—Reasons for the Merger” beginning on page 31 of this proxy statement.

The board unanimously recommends that the Company’s stockholders vote “FOR” the merger proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal.

Record Date, Stockholders Entitled to Vote and Quorum

Only holders of record of shares of common stock as of the close of business on the record date, September 28, 2017, will be entitled to receive notice of and to vote their shares of common stock at the special meeting or any adjournments thereof. As of the record date, there were 31,118,927 shares of common stock outstanding.

Holders of shares of common stock are entitled to one vote on each matter submitted to a vote for each share of common stock owned at the close of business on the record date.

A majority of the shares of common stock entitled to vote at the special meeting, represented in person or by proxy, constitutes a quorum for the transaction of business at the special meeting. Proxies received but marked as abstentions or treated as broker non-votes will be included in the calculation of the number of shares of common stock considered to be present at the special meeting in determining a quorum. Under our by-laws, in the absence of a quorum at the special meeting, the meeting of stockholders may be adjourned.

Required Vote

For the Company to complete the merger, under Delaware law, stockholders holding at least a majority of the shares of common stock outstanding and entitled to vote thereon must vote “FOR” the merger proposal. In addition, under the merger agreement, the receipt of such required vote is a condition to the consummation of the merger. A failure to vote your shares of common stock, an abstention from voting or the failure, with respect of shares held in “street name” through a broker, bank or other nominee, to give voting instructions to such broker, bank or other nominee, will have the same effect as a vote against the merger proposal.

The compensation proposal and the adjournment proposal each requires the affirmative vote of holders of a majority of the shares of common stock present in person or represented by proxy at the meeting and entitled to vote thereon. Accordingly, not voting at the special meeting will have no effect on the outcome of these proposals, but abstentions will have the effect of a vote against these proposals.

Under NYSE rules, brokers, banks or other nominees who hold shares of common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers, banks or other nominees are not allowed to exercise their voting discretion with respect to the approval of matters that are “non-routine” without specific instructions from the beneficial owner. All proposals to be voted on by you at the special meeting are “non-routine” matters, and therefore brokers do not have discretionary authority to vote on any of the proposals. Broker non-votes occur when a broker, bank or other nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power. Accordingly, there can be no broker non-votes at the special meeting, so failure to provide instructions to your broker or other nominee on how to vote will result in your shares not being counted as present at the meeting.

As of the record date, there were 31,118,927 shares of common stock outstanding.

Voting by the Company’s Directors and Executive Officers

At the close of business on the record date, directors and executive officers of the Company were entitled to vote 1,452,742 shares of common stock, or approximately 4.67% of the shares of common stock outstanding on that date.

We currently expect that the Company’s directors and executive officers will vote their shares of common stock “FOR” the merger proposal and the other proposals to be considered at the special meeting, although none of them is obligated to do so.

Voting; Proxies; Revocation

Attendance

All holders of shares of common stock as of the close of business on September 28, 2017, the record date for voting at the special meeting, including stockholders of record and beneficial owners of common stock registered in the “street name” of a bank, broker or other nominee, are invited to attend the special meeting. If you are a stockholder of record, please be prepared to provide proper identification, such as a driver’s license. If you hold your shares of common stock in “street name,” you will need to provide proof of ownership, such as a recent account statement or voting instruction form provided by your bank, broker or other nominee or other similar evidence of ownership, along with proper identification.

Voting in Person

Stockholders of record will be able to vote in person at the special meeting. If you are not a stockholder of record, but instead hold your shares of common stock in “street name” through a bank, broker or other nominee, you must provide a proxy executed in your favor from your bank, broker or other nominee in order to be able to vote in person at the special meeting.

Submitting a Proxy or Providing Voting Instructions

To ensure that your shares of common stock are voted at the special meeting, we recommend that you provide voting instructions promptly by proxy or voting instruction form, even if you plan to attend the special meeting in person.

Shares Held by Record Holder. If you are a stockholder of record as of the record date, you may provide voting instructions by proxy using one of the methods described below.

Shares Held in “Street Name.” If your shares are held by a bank, broker or other nominee on your behalf in “street name,” your bank, broker or other nominee will send you instructions as to how to provide voting instructions for your shares by proxy. Many banks and brokerage firms have a process for their customers to provide voting instructions by telephone or via the Internet, in addition to providing voting instructions by proxy card.

Revocation of Proxies

Any person giving a proxy pursuant to this solicitation has the power to revoke and change it at any time before it is voted. If you are a stockholder of record, you may revoke your proxy at any time before the vote is taken at the special meeting by:

Please note, however, that only your last-dated proxy will count. Attending the special meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to the Company or by sending a written notice of revocation to the Company, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by the Company before the special meeting.

If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee in order to revoke your proxy or submit new voting instructions.

Abstentions

An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting. Abstentions will be included in the calculation of the number of shares of common stock represented at the special meeting for purposes of determining whether a quorum has been achieved.

Abstaining from voting will have the same effect as a vote “AGAINST” the merger proposal, a vote “AGAINST” the advisory (non-binding) proposal on executive compensation payable to the Company’s named executive officers in connection with the merger and a vote “AGAINST” the adjournment proposal.

Adjournments and Postponements

The Company’s stockholders are being asked to approve a proposal to adjourn the special meeting from time to time, if necessary or appropriate, for the purpose of soliciting additional proxies in favor of the merger proposal if there are not sufficient votes at the time of the special meeting to adopt the merger agreement. If this adjournment proposal is approved, the special meeting could be adjourned by the board to any date for the purpose of soliciting additional proxies in favor of the merger proposal if there are not sufficient votes at the time of the special meeting to adopt the merger agreement. If there is not a quorum present at the special meeting, under our by-laws the special meeting may be adjourned by the Chairman of the board or, in the event of his or her absence or disability, the other presiding officer chosen by the board or by vote of the holders of a majority of the voting power of the shares represented at the meeting. In addition, the board could postpone the special meeting before it commences, whether for the purpose of soliciting additional proxies or for other reasons specified in the merger agreement. Under the terms of the merger agreement, the special meeting may be adjourned or postponed for one time only not to exceed ten calendar days (unless Parent otherwise agrees in writing) if the Company reasonably believes that it will be unable to obtain a quorum or it will not receive proxies sufficient to adopt the merger agreement. The special meeting may also be adjourned or postponed for up to ten additional calendar days for the filing and distribution of any supplemental or amended disclosure which the board has determined in good faith is necessary under applicable law.

Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow the Company’s stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or postponed.

Solicitation of Proxies

The board is soliciting your proxy, and we will bear the cost of soliciting proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of shares of our outstanding common stock. MacKenzie Partners, Inc., a proxy solicitation firm, has been retained to assist it in the solicitation of proxies for the special meeting and we will pay MacKenzie Partners, Inc. approximately $30,000, plus reimbursement of out-of-pocket expenses. Proxies may be solicited by mail, personal interview, e-mail, telephone, or via the Internet by MacKenzie Partners, Inc. or, without additional compensation by certain of the Company’s directors, officers and employees.

Other Information

You should not return your stock certificate or send documents representing your shares of common stock with the proxy card. If the merger is completed, the paying agent for the merger will send you a letter of transmittal and instructions for exchanging your shares of common stock for the merger consideration.

THE MERGER (PROPOSAL 1)

Certain Effects of the Merger

If the merger agreement is adopted by the Company’s stockholders and certain other conditions to the closing of the merger are either satisfied or waived, Merger Sub will be merged with and into the Company, with the Company being the surviving corporation.

Upon the consummation of the merger, each share of common stock outstanding immediately prior to the effective time of the merger (other than the excluded shares) will be converted into the right to receive an amount in cash equal to $29.25 per share of common stock.

Our common stock is currently registered under the Exchange Act and is quoted on the NYSE under the symbol “PMC.” As a result of the merger, the Company will cease to be a publicly traded company and will be wholly owned by Parent. Following the consummation of the merger, the registration of shares of our common stock and our reporting obligations under the Exchange Act will be terminated. In addition, upon the consummation of the merger, shares of our common stock will no longer be listed on any stock exchange or quotation system, including the NYSE.

Background of the Merger

The board of directors, together with members of PharMerica’s senior management team, regularly reviews and assesses PharMerica’s operations, performance, prospects and strategic direction. In connection therewith, and with the assistance of financial and legal advisors, they consider potential strategic alternatives, including potential business combinations or other transactions, to strengthen PharMerica’s business and maximize stockholder value. In addition, from time to time, and as noted below, PharMerica has received inquiries from third parties seeking to determine PharMerica’s interest in a business combination transaction.

On June 19, 2015, the board held a meeting. At the invitation of the board, members of senior management were also present. At the meeting, Mr. Gregory Weishar, Chief Executive Officer and Director of PharMerica, reviewed the strategic outlook for PharMerica, the results of preliminary informal discussions that had taken place, at the direction of the board, from April through June 2015 with five private equity firms, including KKR and firms we refer to as Financial Buyer 1, Financial Buyer 2 and Financial Buyer 3. The parties were informally contacted by UBS and BofA Merrill Lynch, which had investment banking relationships with PharMerica. Based on such review, and following a full discussion by the board, the board unanimously determined that PharMerica should initiate a formal process to determine whether there were third parties interested in entering into a potential business combination transaction with PharMerica on terms acceptable to the board, and that management engage one or more investment banking firm(s) and a law firm to advise PharMerica in the process.

Beginning on August 10, 2015 through August 19, 2015, at the direction of the board, UBS and BofA Merrill Lynch contacted eight potential strategic buyers, including WBA and parties we refer to as Strategic Buyer 1, Strategic Buyer 2 and Strategic Buyer 3, and four potential financial buyers, including KKR, Financial Buyer 1, Financial Buyer 2 and Financial Buyer 3 and provided such parties with a summary public information overview regarding a potential business combination transaction with PharMerica. These possible strategic partners were selected because they were among the parties that had previously expressed interest in a potential strategic investment in PharMerica’s sector to UBS or BofA Merrill Lynch, they had the financial capability to execute a transaction, and they were positioned to benefit from potential synergies in a business combination transaction involving PharMerica. These possible financial buyers were selected because of the view that there was some likelihood that they would be interested in pursuing a potential business combination transaction with PharMerica. In order to facilitate the preliminary exploration of discussions regarding a potential business combination transaction with PharMerica, three potential strategic buyers (Strategic Buyer 1, Strategic Buyer 2 and Strategic Buyer 3) and four potential financial buyers (KKR, Financial Buyer 1, Financial Buyer 2 and Financial Buyer 3) subsequently entered into non-disclosure agreements with respect to a potential business combination transaction with PharMerica. Five of the seven non-disclosure agreements contained customary standstill provisions, but none of those provisions precluded any offers in the sale process conducted by the board and none of those provisions currently would restrict any of those parties from making an unsolicited offer to participate in a potential business combination transaction with PharMerica. The remaining five strategic buyers, including WBA, indicated that they were not interested in evaluating the potential business combination transaction and declined to execute a non-disclosure agreement with PharMerica.

On August 28, 2015, the board held a meeting to discuss the completed acquisition by OptumRx of Catamaran and the potential impact of that acquisition on PharMerica’s business, including regarding the differences between the reimbursement rates that each of these entities paid PharMerica. The board also discussed the potential effects of other announced pharmacy benefit manager and insurer consolidations in the industry and deliberated on the most appropriate timing for potentially soliciting interest from third parties for a potential business combination transaction with PharMerica, and the challenges of continuing as a standalone public company (including from PharMerica’s size and lack of scale, and the public market’s emphasis on short-term results) in light of these developments.

On August 31, 2015, the board held a meeting to continue its discussion held on August 28, 2015. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk & Wardwell LLP (which we refer to as Davis Polk), legal counsel to PharMerica, were also present. Representatives of UBS and BofA Merrill Lynch provided an update on the status of preliminary discussions with potential buyers regarding a potential business combination transaction with PharMerica. Representatives of Davis Polk advised on disclosure obligations with respect to business combination transactions. Following a discussion among the board, management and the advisors, the board determined that PharMerica should continue to pursue discussions with potential strategic buyers regarding a potential business combination transaction with PharMerica, but should suspend discussions with potential financial buyers at such time until PharMerica’s budget for 2016 was finalized and until PharMerica had more insight on the effects the pharmacy benefit manager and insurance consolidations would have on PharMerica.

On September 18, 2015, the board held a meeting. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Referring to materials provided to the board in advance of the meeting, senior management and representatives of UBS and BofA Merrill Lynch reviewed with the board the results of their preliminary financial analyses of a potential business combination transaction with PharMerica, PharMerica’s financial projections prepared by PharMerica’s management, and various financial aspects of a possible acquisition of PharMerica by a private equity firm or a strategic buyer and a possible leveraged buyout scenario. The financial advisors also provided an update on the status of preliminary discussions to date with potential buyers regarding a potential business combination transaction with PharMerica. Referring to materials provided to the board in advance of the meeting, a representative of Davis Polk advised on fiduciary duties and disclosure obligations regarding these matters. The board was presented with material relationships disclosures provided by UBS and BofA Merrill Lynch. After discussion and consideration of these disclosures, the board determined that neither UBS nor BofA Merrill Lynch had any material conflict of interest that would prevent it from serving as a financial advisor to PharMerica, and the board approved the engagement of UBS and BofA Merrill Lynch to act as financial advisors to PharMerica for a review of strategic alternatives. PharMerica selected UBS as its financial advisor because UBS is an internationally recognized investment banking firm with substantial experience in similar transactions and because UBS is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, and private placements. PharMerica selected BofA Merrill Lynch to act as PharMerica’s financial advisor on the basis of BofA Merrill Lynch’s experience in transactions similar to the potential business combination transaction with PharMerica, its reputation in the investment community and its familiarity with PharMerica and its business.

In October and November 2015, PharMerica management conducted presentations and meetings covering certain public and non-public information regarding PharMerica with two potential strategic buyers (Strategic Buyer 1 and Strategic Buyer 2) and four potential financial buyers (KKR, Financial Buyer 1, Financial Buyer 2 and Financial Buyer 3). The board had directed PharMerica management, UBS and BofA Merrill Lynch to re-engage in discussions with financial buyers at this time because PharMerica’s budget for 2016 was finalized and PharMerica had more insight on the effects the pharmacy benefit manager and insurance consolidations would have on PharMerica. After such meetings with management, Strategic Buyer 1 and Strategic Buyer 2 declined to proceed with the potential business combination transaction, citing lack of strategic fit. Strategic Buyer 3 declined to proceed subsequent to signing the non-disclosure agreement and without attending a management meeting. Each of the four financial buyers verbally indicated that they could not offer any premium to PharMerica’s then-current stock price, which ranged from $30.13 to $35.19 in November 2015. Each of these verbal indications of interest was preliminary and subject to due diligence.

On December 15, 2015, the board held a meeting. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Referring to materials provided to the board in advance of the meeting, representatives of UBS and BofA Merrill Lynch reviewed with the board their respective illustrative financial analyses of a potential business combination transaction with PharMerica and the status of preliminary discussions with potential buyers regarding a potential business combination transaction with PharMerica, indicating that four potential financial buyers had expressed preliminary interest in a potential business combination transaction and had provided verbal price indications. A representative of Davis Polk reviewed with the board their fiduciary duties and responsibilities and other legal matters applicable in connection with their consideration of a potential business combination transaction, including in relation to discussions between PharMerica’s management and a buyer regarding post-closing compensation arrangements. Following discussion with PharMerica’s senior management team and representatives of UBS, BofA Merrill Lynch and Davis Polk, given the indication that the potential financial buyers would not be in a position to offer a meaningful premium over PharMerica’s then-current stock price (which closed at $30.68 on the day before the meeting, December 14, 2015), the board and the PharMerica management team determined to suspend discussions with potential buyers until the release of PharMerica’s results for fiscal year 2015 and the refinement of management’s forecasts for fiscal year 2016. A representative of Davis Polk reviewed with the board updated material relationships disclosures provided by each of UBS and BofA Merrill Lynch; the board maintained its view was that neither UBS nor BofA Merrill Lynch had any material conflict of interest that would prevent it from serving as a financial advisor to PharMerica.

In January and February 2016, at the direction of the board, UBS and BofA Merrill Lynch re-engaged in discussions with KKR, Financial Buyer 1, Financial Buyer 2 and Financial Buyer 3. At the direction of the board, the financial advisors also contacted three new potential financial buyers to review public information regarding PharMerica. These possible financial buyers were selected because of the view that there was some likelihood that they would be interested in pursuing a potential business combination transaction. One of such new potential financial buyers declined to proceed and two, which we refer to as Financial Buyer 4 and Financial Buyer 5, expressed interest in meeting with PharMerica management. The board determined to continue such discussions with potential buyers regarding a potential business combination transaction with PharMerica after management had considered PharMerica’s preliminary results for fiscal year 2015 and refined its forecasts for fiscal year 2016.

On March 18, 2016, the board held a meeting. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Referring to materials provided to the board in advance of the meeting, representatives of UBS and BofA Merrill Lynch reviewed with the board the status of preliminary discussions with potential buyers regarding a potential business combination transaction with PharMerica, an illustrative timeline for the possible acquisition of PharMerica and the current status of the financing markets. The board discussed PharMerica’s strategic alternatives, including continuing discussions regarding a potential business combination transaction or ceasing discussions and pursuing PharMerica’s standalone plan. The board decided that PharMerica should continue discussions regarding a potential business combination transaction.

Also in March 2016, at the direction of the board, UBS and BofA Merrill Lynch conducted discussions regarding a potential business combination transaction with PharMerica with five previously-contacted financial buyers, including KKR, Financial Buyer 1, Financial Buyer 2, Financial Buyer 4 and Financial Buyer 5, and one new potential financial buyer, which we refer to as Financial Buyer 6, which was selected because of the view that there was some likelihood that it would be interested in pursuing a potential business combination transaction. Each of such financial buyers was given an opportunity to meet with PharMerica management, and discussions included an update on financial performance (including PharMerica’s financial results that were announced on February 26, 2016), an overview of financial projections and drivers of future growth. Meetings with potential buyers that had entered into non-disclosure agreements with PharMerica covered certain public and non-public information, and meetings with potential buyers that had not entered into non-disclosure agreements with PharMerica at that time covered only public information regarding PharMerica. After meetings with management, Financial Buyer 2 and Financial Buyer 5 withdrew from the process.

In April 2016, Financial Buyer 4 and Financial Buyer 6 entered into non-disclosure agreements with respect to a potential business combination transaction with PharMerica. Both of these non-disclosure agreements contained customary standstill provisions, but neither of those provisions precluded any offers in the sale process conducted by the board and neither of those provisions currently would restrict any of those parties from making an unsolicited offer for PharMerica.

Also in April 2016, a first round process letter was sent to four potential financial buyers (KKR, Financial Buyer 1, Financial Buyer 4 and Financial Buyer 6) to gauge their interest in pursuing a potential business combination transaction. At that time, none of the strategic buyers that had been contacted by the financial advisors remained in the potential sale process. Each of such financial buyers was granted access to a virtual data room containing certain non-public information regarding PharMerica in order to facilitate further due diligence prior to submission of preliminary indications of interest. During the course of the following months, the board, following discussions with the financial advisors, considered whether contacting any of the potential buyers that had previously declined to continue participating in the sale process would be likely to lead to such a buyer re-entering the sale process.

On April 21, 2016, PharMerica received a preliminary non-binding indication of interest from KKR for a purchase price of $27.50 per share in an all cash transaction. Financial Buyer 1, Financial Buyer 4 and Financial Buyer 6 declined to proceed with the potential sale process and to provide a non-binding indication of interest.

On April 25, 2016, the board held a meeting to discuss KKR’s proposal. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Referring to materials provided to the board in advance of the meeting, representatives of Davis Polk reviewed with the board various terms of KKR’s proposal, including that the proposal did not contemplate a financing “out,” but did contemplate that if there were a financing failure KKR could pay a reverse termination fee and terminate the transaction. A representative of Davis Polk then reviewed with the board their fiduciary duties and responsibilities and other legal matters applicable in connection with their consideration of a potential business combination transaction. After discussion among the board, management and the advisors, the board authorized management to permit KKR to proceed with further due diligence.

On April 26, 2016, KKR was invited to continue with the potential sale process, and the final proposal submission date was set for June 1, 2016. KKR’s accounting advisor and Simpson Thacher & Bartlett LLP, which we refer to as Simpson Thacher, legal counsel to KKR, were granted access to a virtual data room to perform accounting, tax and legal due diligence.

On May 9, 2016, management of PharMerica held a call with KKR to provide a business update and discuss financial results for the first quarter of fiscal year 2016. On May 10, 2016, an initial draft of the merger agreement for the proposed transaction was provided to KKR and its advisors in the virtual data room. On May 20, 2016 a full-day meeting was held in Louisville, Kentucky with management and KKR. At the meeting, it was discussed that KKR planned to partner with WBA in seeking to acquire PharMerica, and KKR explained its view that a partnership between KKR and WBA for the acquisition, in which WBA would become a minority investor, would be in both KKR’s and PharMerica’s interests and would allow KKR to propose a higher price than it would be willing to otherwise propose.

Also in May 2016, Financial Buyer 3 withdrew its interest in a potential business combination transaction with PharMerica.

On May 24, 2016, KKR informed UBS that they would need more time to conduct due diligence and, after discussion with management, KKR communicated that a final proposal should be expected by June 10, 2016. On May 31, 2016, KKR indicated that partnering with WBA would require WBA to conduct its own due diligence, which KKR expected to take several weeks. On June 1, 2016, WBA entered into a non-disclosure agreement with PharMerica, and the non-disclosure agreement between KKR and PharMerica was amended to permit KKR to work with WBA on the proposed transaction. WBA’s non-disclosure agreement with PharMerica contained customary standstill provisions, which have since expired. PharMerica extended the final proposal submission deadline to the week of June 20, 2016, and KKR indicated that it would submit a revised non-binding proposal on June 10, 2016 with an updated indicative price.

On June 6, 2016, the board held a meeting. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Referring to materials provided to

the board in advance of the meeting, representatives of UBS and BofA Merrill Lynch reviewed with the board the status of preliminary discussions with potential buyers regarding a potential business combination transaction with PharMerica, including KKR and WBA. The board discussed the potential implications (including as to timing and deal terms) of the inclusion of WBA, as a minority investor, for the potential KKR/WBA transaction. The board also discussed PharMerica’s strategic alternatives, including continuing discussions regarding a potential business combination transaction or ceasing discussions and pursuing PharMerica’s standalone plan. The board decided that PharMerica should continue discussions regarding a potential business combination transaction. Referring to a written presentation provided in advance of the meeting, senior management discussed with the board PharMerica’s proposed five-year financial projections prepared by PharMerica’s management. After discussion, the board approved the addition of financial projections for the fiscal year 2020 to the existing otherwise unchanged projections.

Also on June 6, 2016, KKR and WBA informed PharMerica that they needed to conduct additional due diligence. On June 13, 2016, WBA entered into a clean room confidentiality agreement with PharMerica, and WBA’s accounting advisor received data from both PharMerica and WBA to conduct an analysis that was expected to be completed early in the week of June 20, 2016.

On June 16, 2016, the board held a meeting. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Referring to materials provided to the board in advance of the meeting, representatives of UBS and BofA Merrill Lynch reviewed with the board the status of preliminary discussions with KKR and WBA. After discussion, the board determined to grant KKR and WBA additional time to conduct due diligence and submit a proposal.

On June 17, 2016, KKR and WBA were granted additional time to conduct due diligence and submit a proposal. On June 23, 2016, KKR informed PharMerica that there had been delays in obtaining synergy estimates and that KKR expected to provide a response early in the week of June 27, 2016. On June 24, 2016, KKR submitted a markup of the merger agreement to PharMerica and its advisors. Among other things, KKR indicated that it would not be willing to agree to the go-shop provision that PharMerica had proposed in the initial draft of the merger agreement. Also on June 24, WBA’s accounting advisor completed its analysis of data available in the clean room and delivered its results to WBA.

On June 30, 2016, KKR informed Mr. Weishar and UBS that KKR would not be in a position to submit a revised proposal until the week of July 4, 2016 and needed the additional time to finalize the agreement between KKR and WBA regarding their joint proposal.

On July 1, 2016, the board held a meeting. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Referring to materials provided to the board in advance of the meeting, representatives of UBS and BofA Merrill Lynch reviewed with the board the status of preliminary discussions with potential buyers regarding a potential business combination transaction with PharMerica, including KKR and WBA. Referring to materials provided to the board in advance of the meeting, a representative of Davis Polk reviewed with the board key issues in the markup of PharMerica’s draft of the merger agreement that had been received from KKR in anticipation of submitting their joint proposal with WBA. Among other things, the board discussed that PharMerica had run an extensive sale process in connection with discussing KKR’s unwillingness to agree to a go-shop provision. The board also discussed PharMerica’s strategic alternatives, including continuing discussions regarding a potential business combination transaction or ceasing discussions and pursuing PharMerica’s standalone plan. The board decided that PharMerica should continue discussions regarding a potential business combination transaction.

At this time and other times in the following months, KKR indicated to PharMerica that the potential business combination transaction with PharMerica would be delayed.

On August 24, 2016, Reuters published an article reporting that PharMerica was exploring a potential sale process. Following that article, UBS and BofA Merrill Lynch received eleven inbound inquiries from potentially interested buyers, including from two strategic buyers (including Strategic Buyer 2 and a strategic buyer that had not previously been contacted by UBS or BofA Merrill Lynch) and nine financial buyers that had not previously been contacted by UBS or BofA Merrill Lynch, one of which we refer to as Financial Buyer 7). None of such inbound inquiries led to an expression of interest in actually pursuing a transaction or the execution of a new non-disclosure agreement. On the day the article was published, PharMerica’s stock price increased by 13% over its unaffected stock price of $22.55 on August 23, 2016.

On September 14, 2016, KKR and WBA submitted a non-binding joint proposal to acquire 100% of PharMerica’s common stock for $28.75 per share in an all cash transaction, subject to successful completion of confirmatory due diligence, and requested a three-week exclusivity period. PharMerica’s stock closed at $26.20 on September 14, 2016.

On September 16, 2016, the board held a meeting to discuss the KKR/WBA proposal. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Referring to materials provided to the board in advance of the meeting, representatives of UBS and BofA Merrill Lynch reviewed with the board the status of preliminary discussions with potential buyers regarding a potential business combination transaction with PharMerica, including the joint proposal from KKR and WBA, and the inbound inquiries they had received following the Reuters article. The financial advisors updated the board on the nature of those inbound inquiries, and in particular that none of such parties indicated that they would provide an indicative price for a potential business combination transaction with PharMerica. Referring to materials provided to the board in advance of the meeting, a representative of Davis Polk reviewed with the board key issues in the markup of PharMerica’s draft of the merger agreement that had been received from KKR on June 24, 2016 in anticipation of submitting their joint proposal with WBA. Representatives of UBS and BofA Merrill Lynch reviewed with the board an updated preliminary financial analysis and, in considering KKR and WBA’s request for exclusivity, the board discussed the extensive sale process that had been conducted, the absence of other proposals, the fact that other bidders had withdrawn from the process, the fact that the inbound inquiries had produced nothing concrete, had provided indicative prices significantly below the KKR/WBA proposal, and that each of those third parties would still be at a very early stage in their processes. Following a discussion among the board, management and the advisors, the board directed the advisors to negotiate with KKR and WBA and their counsel regarding exclusivity, the purchase price and other outstanding issues.

On September 19, 2016, after receiving feedback from UBS on the board’s views regarding price, various contract terms that were being negotiated and the requested exclusivity as directed by the board, KKR and WBA verbally increased their proposal to $29.25 per share but made clear that they would not be willing to offer any further increases on price.

On September 20, 2016, the board held a meeting. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Representatives of UBS and Davis Polk updated the board on the status of their negotiations with KKR and WBA. Following discussion of, among other things, KKR and WBA’s increased price proposal and strategy on negotiating price, the board instructed the advisors to continue negotiations with KKR and WBA.

On September 23, 2016, after reaching agreement with KKR and WBA on several contract terms in the merger agreement, PharMerica executed an exclusivity agreement with KKR and WBA that was scheduled to expire on October 14, 2016.

During the period between September 23, 2016 and October 14, 2016, KKR and WBA continued to conduct due diligence on PharMerica. In addition, on September 28, 2016, Davis Polk sent Simpson Thacher a draft of the antitrust support side letter.

Upon expiration of exclusivity on October 14, 2016, KKR and WBA reiterated their interest in pursuing a business combination transaction but did not request an extension of the exclusivity period. At that time, KKR and WBA estimated that an additional one to two months would be required before they could pursue a potential PharMerica transaction.

On October 14, 2016, the board held a meeting to review the current status of the transaction process. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. The board also discussed PharMerica’s strategic alternatives, including continuing discussions regarding a potential business combination transaction or ceasing discussions and pursuing PharMerica’s standalone plan. Following discussion, the board determined to continue discussions regarding a potential business combination transaction and to permit KKR and WBA to continue to conduct due diligence despite the expiration of the exclusivity period.

From October 2016 through March 2017, KKR and WBA continued with their remaining due diligence. On December 7, 2016, KKR informed PharMerica management that KKR and WBA were still interested in pursuing a proposed transaction with PharMerica and indicated that they could be in a position to sign the transaction with PharMerica in mid-January 2017.

The board held meetings on December 13, 2016 and January 26, 2017 to review transaction process updates. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. The board also discussed other potential strategic alternatives and the board authorized management and the financial advisors to contact other parties potentially interested in a potential business combination transaction with PharMerica.

During the week of February 6, 2017, WBA continued its due diligence and indicated that it was still interested in pursuing a potential business combination transaction with PharMerica.

In February 2017, in parallel with KKR’s and WBA’s due diligence, UBS and BofA Merrill Lynch, at PharMerica management’s instruction and with the approval of the board, contacted two potential strategic buyers (which were selected because of the view that there was some likelihood that they would be interested in a potential business combination transaction with PharMerica given strategic fit) and Financial Buyer 7 (which had previously expressed interest in a potential business combination transaction with PharMerica), to discuss their interest in a potential business combination transaction with PharMerica. All three potential buyers declined to engage. Following discussions with the financial advisors, the board determined that it would not be useful to contact any other potential buyers at that time, given the extensive sale process, the Reuters article reporting that PharMerica was exploring a potential sale process, and discussions with many potential bidders that had been conducted by the financial advisors to date.

On March 1, 2017, KKR and WBA had a meeting with PharMerica’s management to review financial results for fiscal year 2016 and an updated budget for fiscal year 2017. The parties also discussed strategy and potential synergies.

On March 24, 2017, the board held a meeting. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. At the meeting, a representative of UBS updated the board on the status of negotiations with KKR and WBA and the outcome of the financial advisors’ outreach to other potential financial and strategic buyers. The financial advisors reviewed with the board their respective updated preliminary financial analyses of the potential business combination transaction with the KKR and WBA bidder group. The board then discussed potential strategic alternatives, including continuing discussions regarding a potential business combination transaction with KKR and WBA or ceasing discussions and pursuing PharMerica’s standalone plan. Following discussion, the board determined to continue the process to pursue a potential business combination transaction with KKR and WBA and to propose to KKR and WBA a firm timetable to complete the transaction. Mr. Weishar subsequently communicated these expectations to Mr. James Momtazee, Member & Head of Health Care Industry Team – Americas of KKR.

On April 5, 2017, KKR and WBA responded with a proposed timetable to complete remaining diligence and to execute a definitive merger agreement on a target date of May 12, 2017.

On April 27, 2017, KKR and WBA submitted a written non-binding proposal reaffirming their $29.25 per share proposal in an all cash transaction, subject to completion of confirmatory due diligence, finalized financing commitment papers, discussion of management equity arrangements and negotiation of definitive transaction agreements. None of the other potential financial or strategic buyers that UBS and BofA Merrill Lynch had contacted had submitted a written expression of interest at this time, and no other expressions of interest were thereafter received, as all of the previously interested potential buyers had indicated that they were no longer interested in pursuing a potential business combination transaction with PharMerica.

On May 1, 2017, the board held a meeting. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk were also present. Referring to a written presentation provided in advance of the meeting, management and representatives of UBS and BofA Merrill Lynch discussed with the board PharMerica’s five-year financial projections prepared by PharMerica’s management. Due to the lapse of time, PharMerica management updated the five-year projections to reflect the expected impact of certain transactions and legislation and to use actual 2016 results as the base for the five-year projections. The updated five-year projections were approved by the board. Referring to written presentations

provided in advance of the meeting, representatives of UBS and BofA Merrill Lynch presented (i) an update on the status of the transaction process, (ii) an overview of the proposed transaction and the history of the transaction process, and (iii) their respective preliminary financial analyses of the proposed transaction with KKR and WBA. Referring to a written presentation provided in advance of the meeting, representatives of Davis Polk reviewed with the board the terms of the draft merger agreement and antitrust support side letter, including the key outstanding deal points in PharMerica’s negotiations with KKR and WBA, including as to termination fees, financing commitments and the undertakings as to antitrust matters in various jurisdictions. Mr. Weishar updated the board on the status of discussions with KKR regarding expectations for management employment and compensation arrangements. The board also discussed PharMerica’s strategic alternatives, including continuing discussions regarding a potential business combination transaction or ceasing discussions and pursuing PharMerica’s standalone plan. The board decided that PharMerica should continue discussions regarding a potential business combination transaction.

Throughout May, June and July of 2017, PharMerica’s management regularly updated the board regarding the progress of final diligence and negotiation of the merger agreement and the other transaction agreements. The board held meetings on June 1, 2017, June 14, 2017, June 21, 2017, June 25, 2017 and July 10, 2017 to discuss the status of negotiations regarding the proposed transaction. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk also were present at these meetings. In addition, the board was presented with the final version of the BofA Merrill Lynch material relationships disclosure memorandum, dated July 20, 2017, which we refer to as the BofA Merrill Lynch disclosure memorandum. Previous versions of the BofA Merrill Lynch disclosure memorandum, dated September 6, 2015, April 24, 2016, July 7, 2016 and April 28, 2017, and related email disclosure dated December 14, 2015, had already been presented to the board. The BofA Merrill Lynch disclosure memorandum included certain information concerning BofA Merrill Lynch’s material relationships with KKR and WBA and noted, among other things, that a senior member of the financial advisory deal team working with PharMerica is a member of the coverage team for WBA and a member of the financial advisory deal teams advising and seeking to advise WBA regarding acquisition and disposition transactions unrelated to PharMerica, and that certain members of the financial advisory deal team working with PharMerica had included PharMerica as one of several potential opportunities in discussion materials for KKR and Financial Buyer 4, among others, and discussed generally PharMerica with WBA during ordinary course coverage discussions (though no discussion materials were provided). Also, the board was presented with the final version of the UBS material relationships disclosure memorandum on July 31, 2017, which we refer to as the UBS disclosure memorandum. Previous versions of the UBS disclosure memorandum were delivered to the board on August 26, 2015 and February 1, 2017, and a preliminary disclosure memorandum was delivered on November 24, 2015. The UBS disclosure memorandum included certain information concerning UBS’ material relationships with KKR and WBA. Following consideration of these disclosures, the board reaffirmed its view that neither UBS nor BofA Merrill Lynch had any material conflict of interest that would prevent it from serving as a financial advisor to PharMerica.

On August 1, 2017, the board held a meeting to review the terms of the proposed transaction with KKR and WBA. At the invitation of the board, members of senior management and representatives of UBS, BofA Merrill Lynch and Davis Polk also were present. Prior to the meeting, copies of the current drafts of the merger agreement, antitrust support side letter and related transaction agreements were provided to the board. At the meeting, representatives of Davis Polk reviewed the terms of the draft merger agreement and other transaction documents, and updated the board as to the resolution of deal points that had been open. Representatives of Davis Polk also discussed with the board the debt financing commitment letters, as well as the no-shop restrictions in the merger agreement and reviewed with the board public disclosure obligations and operating restrictions that would apply to PharMerica between the signing of the merger agreement and the closing of the proposed transaction. UBS reviewed with the board its financial analysis of the merger consideration and delivered to the board an oral opinion, which was confirmed by delivery of a written opinion dated August 1, 2017, to the effect that, as of that date and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received in the merger by holders of common stock (other than Parent, Merger Sub and their affiliates), was fair, from a financial point of view, to such holders. Also at this meeting, BofA Merrill Lynch reviewed with the board its financial analysis of the merger consideration and delivered to the board an oral opinion, which was confirmed by delivery of a written opinion dated August 1, 2017, to the effect that, as of the date of its opinion and based on and subject to various assumptions and

limitations described in its opinion, the merger consideration to be received in the merger by holders of common stock, was fair, from a financial point of view, to such holders. Following questions from and discussions among the board and with their advisors regarding the proposed transaction, the board unanimously determined it was advisable, fair to and in the best interests of PharMerica and its stockholders to enter into the merger agreement, substantially in the form presented, and to consummate the merger and the other transactions contemplated thereby, and the board unanimously approved, adopted and authorized the merger agreement, the antitrust support side letter and the transactions contemplated thereby, resolved, subject to the provisions of the merger agreement, that the merger agreement be submitted to PharMerica’s stockholders and recommended that PharMerica’s stockholders approve and adopt the merger agreement and the merger. The board also unanimously approved the creation of a Special Meeting Committee to perform certain administrative functions related to the special meeting of PharMerica’s stockholders.

On August 1, 2017, after the ending of trading on the New York Stock Exchange, the parties executed the merger agreement, the antitrust support side letter and related transaction agreements.

Early in the morning on August 2, 2017, and prior to the commencement of trading on the New York Stock Exchange, PharMerica issued a press release announcing the transaction. PharMerica filed this press release on August 2, 2017 with the SEC.

Reasons for the Merger

On August 1, 2017, the board unanimously approved the merger agreement and determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of PharMerica and its stockholders. Accordingly, the board unanimously recommends that PharMerica stockholders vote “FOR” the merger proposal.

In the course of making the unanimous decision to approve and recommend the merger agreement and the transactions contemplated thereby, including the merger, the board consulted with outside legal and financial advisors and PharMerica’s management team, and considered a number of factors that it believed supported its decision, including, without limitation, the following (which are not necessarily presented in order of relative importance):

Attractive Value. The board concluded that the consideration of $29.25 per share in cash represented an attractive valuation for the Company and an opportunity for the Company’s stockholders to receive a meaningful premium over the market price of the common stock and over the unaffected market price of the common stock. The board reviewed the current and historical market prices of the common stock, including the market performance of the common stock relative to those of other participants in the Company’s industry and general market indices, and the extensive sale process undertaken by the Company, including:

implementing the Company’s business plan, in a situation where, in the judgment of the board and management, informed by the views of the Company’s advisors, there was no realistic likelihood of an alternative attractive bid.

Best Alternative for Maximizing Stockholder Value. The board considered that the merger consideration of  $29.25 in cash per share was more favorable to the Company’s stockholders than the likely value that might result from other potential transactions or remaining a standalone company. This decision was based on, among other things, the board’s assessment of:

Opinions of the Company’s Financial Advisors. The board considered the financial analysis presentations related to the fairness opinions delivered by each of UBS and BofA Merrill Lynch to the board on August 1, 2017, as well as:

Relationships with Financial Advisors. The determination of the board that the relationships between each of UBS and BofA Merrill Lynch, on the one hand, and each of the Company, KKR and Walgreens, on the other hand, disclosed to the board by UBS and BofA Merrill Lynch, respectively, would not impair the ability of either UBS or BofA Merrill Lynch to provide impartial advice to the board.

Greater Certainty of Value. The board considered that the proposed merger consideration is all cash, so that the transaction provides stockholders certainty of value and liquidity for their shares. The receipt of cash consideration also eliminates the risk for our stockholders of the continued execution of our business on a standalone basis.

Business Reputation of KKR and Walgreens. The board considered the business reputation, management and financial resources of KKR and Walgreens, with respect to the transaction. The board believed these factors supported the conclusion that a transaction with affiliates of KKR and Walgreens could be completed relatively quickly and in an orderly manner.

Likelihood of Completion. The board considered the likelihood of completion of the merger in light of the terms of the merger agreement and the closing conditions, including:

Opportunity to Receive Unsolicited Alternative Proposals and to Terminate the Transaction in Order to Accept a Superior Proposal. The board considered the terms of the merger agreement permitting PharMerica to receive unsolicited alternative proposals, and the other terms and conditions of the merger agreement, including:

Other Factors. The board also considered:

procedures under Delaware law, which provides those eligible stockholders with an opportunity to have a Delaware court determine the fair value of their shares, which may be more than, less than, or the same as the amount such stockholders would have received under the merger agreement;

In the course of reaching the determinations and decisions and making the recommendation described above, the board considered the following risks and potentially negative factors relating to the merger agreement, the merger and the other transactions contemplated thereby:

The foregoing discussion of the information and factors considered by the board includes the material factors considered by the board and is not intended to be an exhaustive list of the information and factors considered by the board in its consideration of the merger. In view of the variety of factors considered in connection with its evaluation of the merger, the board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The board recommended the merger agreement and the merger based upon the totality of the information it considered.

Recommendation of the Company’s Board of Directors

After careful consideration, the board has unanimously (i) determined that the merger agreement and transactions contemplated thereby are fair to and in the best interests of the Company’s stockholders, (ii) approved, adopted and declared advisable the merger agreement and the transactions contemplated thereby, and (iii) resolved, subject to the provisions of the merger agreement, to recommend the acceptance of the merger agreement, including the merger, by the stockholders of the Company at the special meeting. Certain factors considered by the board in reaching its decision to approve the merger agreement and approve the merger can be found in the section entitled “The Merger (Proposal 1)—Reasons for the Merger” beginning on page 31 of this proxy statement.

The board unanimously recommends that the stockholders of the Company vote “FOR” the merger proposal.

Opinions of the Company’s Financial Advisors

Opinion of UBS

PharMerica retained UBS to act as financial advisor to PharMerica. As part of that engagement, the board requested that UBS render an opinion as to the fairness, from a financial point of view, to the holders of common stock (other than Parent, Merger Sub and their affiliates) of the merger consideration to be received by such holders in the merger. On August 1, 2017, at a meeting of the board held to evaluate the merger and the merger agreement and the transactions contemplated thereby, UBS delivered to the board an oral opinion, which opinion was subsequently confirmed by delivery of a written opinion, dated August 1, 2017, to the effect that, as of that date and based on and subject to various assumptions made, matters considered, and qualifications and limitations described in its written opinion, the merger consideration to be received by the holders of common stock (other than Parent, Merger Sub and their affiliates) in the merger was fair, from a financial point of view, to such holders.

The full text of UBS’s opinion to the board describes the assumptions made, procedures followed, matters considered, and qualifications and limitations on the review undertaken by UBS. The opinion is attached to this proxy statement as Annex B and is incorporated into this proxy statement by reference. Holders of common stock are encouraged to read UBS’s opinion carefully in its entirety. UBS’s opinion was provided for the benefit of the board (in its capacity as such) in connection with, and for the purpose of, its evaluation of

the merger consideration to be received by the holders of common stock (other than Parent, Merger Sub and their affiliates) in the merger from a financial point of view, and does not address any other aspect of the merger or any related transaction. UBS’s opinion does not address the relative merits of the merger or any related transaction as compared to other business strategies or transactions that might be available with respect to PharMerica or PharMerica’s underlying business decision to effect the merger or any related transaction. UBS’s opinion does not constitute a recommendation to any stockholder of PharMerica as to how such stockholder should vote or act with respect to the merger or any related transaction. The following summary of UBS’s opinion is qualified in its entirety by reference to the full text of UBS’s opinion.

In arriving at its opinion, UBS, among other things:

In connection with its review, with the consent of the board, UBS assumed and relied upon, without independent verification, the accuracy and completeness in all material respects of the information provided to or reviewed by UBS for the purpose of the opinion. In addition, with the consent of the board, UBS did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of PharMerica, nor was UBS furnished with any such evaluation or appraisal. With respect to the financial forecasts and estimates referred to above, UBS assumed, at the direction of the board, that they were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of PharMerica as to the future financial performance of PharMerica. In addition, UBS assumed, with the approval of the board, that the financial forecasts and estimates referred to above will be achieved at the times and in the amounts projected. The opinion of UBS was necessarily based on economic, monetary, market and other conditions as in effect on, and the information available to UBS as of, the date of its opinion.

At the direction of the board, UBS was not asked to, nor did it, offer any opinion as to the terms, other than the merger consideration to the extent expressly specified in the opinion, of the merger agreement or any related documents or the form of the merger or any related transaction. UBS expressed no opinion as to (i) the fairness of the amount or nature of any compensation to be received by any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the merger consideration, or (ii) the price at which the common stock will trade at any time. In rendering its opinion, UBS assumed, with the consent of the board, that (a) the parties to the merger agreement will comply with all material terms of the merger agreement, and (b) the merger will be consummated in accordance with the terms of the merger agreement without any adverse waiver or amendment of any material term or condition thereof. UBS also assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any material adverse effect on PharMerica, Parent or the merger.

In connection with rendering its opinion to the board, UBS performed a variety of financial and comparative analyses, which are summarized below. The following summary is not a complete description of all analyses performed and factors considered by UBS in connection with its opinion. The preparation of a fairness opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description. With respect to the selected public company analysis and the selected transactions analysis summarized below, no company or transaction used as a comparison was identical to PharMerica, or the transactions contemplated by the merger agreement. These analyses necessarily involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading or acquisition values of the companies concerned.

UBS believes its analyses and the summary contained in this proxy statement must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying UBS’s analyses and opinion. UBS did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion, but rather arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole.

The estimates of the future performance of PharMerica underlying the analyses of UBS are not necessarily indicative of actual future results or values, which may be significantly more or less favorable than those estimates. These estimates are necessarily subject to uncertainty because, among other things, they are based upon numerous factors and events beyond the control of PharMerica or its advisors. In performing its analyses, UBS considered industry performance, general business and economic conditions and other matters, many of which were beyond the control of PharMerica. Estimates of the financial value of companies do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold or acquired.

The merger consideration to be received by the holders of common stock was determined through negotiations between Parent and PharMerica and the decision by PharMerica to enter into the merger agreement to effect the transaction was solely that of the board. UBS’s opinion and financial analyses were only one of many factors considered by the board in its evaluation of the merger and should not be viewed as determinative of the views of the board or the management of PharMerica with respect to the merger or the merger consideration. While UBS provided advice to the board in connection with the proposed merger, the board determined the consideration and UBS did not recommend any specific amount or type of consideration.

Summary of the Financial Analyses of UBS

The following is a summary of the material financial analyses performed by UBS and reviewed with the board on August 1, 2017 in connection with UBS’s opinion. The financial analyses summarized below include information presented in tabular format. In order for UBS’s financial analyses to be fully understood, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of UBS’s financial analyses.

Selected Public Companies Analysis

UBS compared selected financial data of PharMerica with corresponding data of the following nine publicly traded U.S. companies, which, based on its professional judgment and expertise, UBS believed to be generally relevant to its analysis (the “Selected Companies”), three of which were pharmaceutical distributors, three of which were long term care providers, and solely for reference purposes (as such companies had businesses that had comparatively less overlap with the business of PharMerica), one of which was a pharmaceutical benefits management company, one of which was an infusion services company, and one of which was a specialty pharmacy company:

Selected Companies

UBS reviewed, among other things:

Financial data for the Selected Companies were based on FactSet data, public filings and other publicly available information as well as analyst research.

UBS then compared such multiples derived for the Selected Companies that were pharmaceutical distribution companies and long term care companies, and solely for reference purposes, the Selected Companies that were a pharmaceutical benefits management company, an infusion services company, and a specialty pharmacy company, with corresponding multiples implied for PharMerica, based on, among other things:

Estimated financial data used for the EV/EBITDA Multiples of PharMerica and Adj. P/E Multiples of PharMerica were based on the financial forecasts and estimates prepared by the management of PharMerica. See “Projected Financial Information.”

This analysis indicated the following implied EV/EBITDA Multiples and Adj. P/E Multiples for the Selected Companies that were pharmaceutical distribution companies and long term care companies, and solely for reference purposes, the Selected Companies that were a pharmaceutical benefits management company, an infusion services company, and a specialty pharmacy company, as compared to corresponding implied EV/EBITDA Multiples and Adj. P/E Multiples for PharMerica:

Discounted Cash Flow Analysis

UBS performed discounted cash flow analyses utilizing financial forecasts and estimates prepared by the management of PharMerica. See “Projected Financial Information.” UBS calculated ranges of implied present values (as of June 30, 2017) of the standalone, unlevered, free cash flows that PharMerica was forecasted to generate from July 1, 2017 through December 31, 2021 and of terminal values for PharMerica. Implied terminal values were derived by applying to PharMerica’s 2021 estimated EBITDA a range of estimated terminal last twelve months EBITDA multiples of 7.5x to 9.5x, which range was selected based on current and historical trading EBITDA multiples of PharMerica and certain of the Selected Companies. Implied present values of cash flows and terminal values were calculated using discount rates ranging from 8% to 9%, reflecting estimates of PharMerica’s weighted average cost of capital. The discounted cash flow analyses resulted in a range of implied equity values of $24.00 to $33.90 per share for PharMerica.

Selected Transactions Analysis

In order to provide certain context for the primary valuation and financial analyses in connection with its opinion as described above, UBS performed the selected transactions analysis summarized below, solely for reference purposes. UBS does not consider such analysis to be a determinative valuation methodology for purposes of its opinion.

UBS reviewed publicly available information and Wall Street research analyst reports relating to the following 14 acquisition transactions involving public target companies of which two were institutional pharmacy / specialty pharmacy companies, five were pharmaceutical benefits management companies, three were infusion services companies, and four were long term care companies, which, based on its professional judgment and expertise, UBS believed to be generally relevant to its analysis (the “Selected Transactions”).

Institutional Pharmacy / Specialty Pharmacy

Pharmaceutical Benefits Management

Infusion Services

Long Term Care

UBS reviewed, among other things, transaction values of the target company in each of the Selected Transactions as a multiple of such target company’s EBITDA for the prior twelve months and EBITDA for the next twelve months. UBS then compared such multiples derived for the target companies with corresponding multiples calculated for PharMerica. Financial data regarding the Selected Transactions and used to determine the multiples were based on public filings, Wall Street research analyst reports, and press releases. Estimated financial data used for PharMerica were based on the financial forecasts and estimates prepared by the management of PharMerica. See “Projected Financial Information.”

These analyses indicated the following multiples for the target companies in each of the Selected Transactions, as compared to the corresponding implied multiples for PharMerica:

Miscellaneous

Under the terms of UBS’s engagement, PharMerica agreed to pay UBS an aggregate fee of $6.06 million, of which $500,000 became payable upon delivery of UBS’s opinion, and the remainder of which is contingent upon consummation of the merger. In addition, PharMerica agreed to reimburse UBS for its reasonable and documented expenses, including fees, disbursements and other charges of counsel, and to indemnify UBS and related parties against liabilities, including liabilities under federal securities laws, relating to, or arising out of, its engagement. In the past, UBS and its affiliates have provided investment banking services to WBA and certain of its affiliates, unrelated to the proposed merger, for which UBS and its affiliates received compensation, including (i) providing financial advisory services to WBA in connection with its proposed acquisition of Rite Aid, (ii) acting as administrative agent, joint lead arranger and joint lead bookrunner in connection with WBA’s $12,800,000,000 bridge facility commitment for its proposed acquisition of Rite Aid, and (iii) acting as joint bookrunner in connection with WBA’s issuance of notes in the aggregate principal amount of $6,000,000,000. In addition, in the past, UBS and its affiliates have provided lending, investment banking and underwriting services to KKR and certain of its affiliates, unrelated to the proposed merger, for which UBS and its affiliates received compensation. From January 1, 2015 through July 31, 2017, UBS and its affiliates derived revenues from KKR, WBA and certain of their respective affiliates of approximately $125,000,000 in the aggregate for investment banking, lending and underwriting services. In the ordinary course of business, UBS and its affiliates may hold or trade, for their own accounts and the accounts of their customers, securities of PharMerica, WBA, KKR, and their respective affiliates, and, accordingly, may at any time hold a long or short position in such securities. The issuance of UBS’s opinion was approved by an authorized committee of UBS.

PharMerica selected UBS as its financial advisor in connection with the merger because UBS is an internationally recognized investment banking firm with substantial experience in similar transactions. UBS is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, and private placements.

Opinion of BofA Merrill Lynch

The Company has retained BofA Merrill Lynch to act as the Company’s financial advisor in connection with the merger. BofA Merrill Lynch is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. The Company selected BofA Merrill Lynch to act as the Company’s financial advisor in connection with the merger on the basis of BofA Merrill Lynch’s experience in transactions similar to the merger, its reputation in the investment community and its familiarity with the Company and its business.

On August 1, 2017, at a meeting of the board held to evaluate the merger, BofA Merrill Lynch delivered to the board an oral opinion, which was confirmed by delivery of a written opinion dated August 1, 2017, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the merger consideration to be received in the merger by holders of shares of common stock was fair, from a financial point of view, to such holders.

The full text of BofA Merrill Lynch’s written opinion to the board, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex C to this document and is incorporated by reference herein in its entirety. The following summary of BofA Merrill Lynch’s opinion is qualified in its entirety by reference to the full text of the opinion. BofA Merrill Lynch delivered its opinion to the board for the benefit and use of the board (in its capacity as such) in connection with and for purposes of its evaluation of the merger consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the merger. BofA Merrill Lynch’s opinion does not address any other aspect of the merger and does not constitute a recommendation to any stockholder as to how to vote or act in connection with the proposed merger or any other matter.

In connection with rendering its opinion, BofA Merrill Lynch, among other things:

In arriving at its opinion, BofA Merrill Lynch assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with BofA Merrill Lynch and relied upon the assurances of the management of the Company that it was not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the Company management forecasts and the NOLs, BofA Merrill Lynch was advised by the Company, and assumed, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of the Company as to the future financial performance of the Company and the other matters covered thereby. BofA Merrill Lynch relied, at the direction of the Company, on the assessments of the management of the Company as to the ability to utilize the NOLs and was advised by the Company, and assumed, at the direction of the Company, that such NOLs would be utilized in the amounts and at the times projected. BofA Merrill Lynch did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company, nor did BofA Merrill Lynch make any physical inspection of the properties or assets of the Company. BofA Merrill Lynch did not evaluate the solvency or fair value of the Company, Parent or Merger Sub under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Merrill Lynch assumed, at the direction of the Company, that the merger would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the merger, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, would be imposed that would have an adverse effect on the Company or the contemplated benefits of the merger. BofA Merrill Lynch also assumed, at the direction of the Company, that the final executed Transaction Agreements would not differ in any material respect from the Draft Transaction Agreements reviewed by BofA Merrill Lynch.

BofA Merrill Lynch expressed no view or opinion as to any terms or other aspects or implications of the merger (other than the merger consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the merger, any related transactions or any other agreement, arrangement or understanding entered into in connection with or related to the merger or otherwise. BofA Merrill Lynch’s opinion was limited to the fairness, from a financial point of view, of the merger consideration to be received by holders of shares of common stock and no opinion or view was expressed with respect to any consideration received in connection with the merger by the holders of any class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the merger, or class of such persons, relative to the merger consideration or otherwise. Furthermore, no opinion or view was expressed as to the relative merits of the merger in comparison to other strategies or transactions that might be available to the Company or in which the Company might engage or as to the underlying business decision of the Company to proceed with or effect the merger. BofA Merrill Lynch also did not express any view or opinion with respect to, and BofA Merrill Lynch relied, at the direction of the Company, upon the assessments of representatives of the Company regarding, legal, regulatory, accounting, tax and similar matters relating to the Company or the merger, as to which matters BofA Merrill Lynch understood that the Company obtained such advice as it deemed necessary from qualified professionals. In addition, BofA Merrill Lynch expressed no opinion or recommendation as to how any stockholder should vote or act in connection with the merger or any other matter. Except as described in this summary, the Company imposed no other limitations on the investigations made or procedures followed by BofA Merrill Lynch in rendering its opinion.

BofA Merrill Lynch’s opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Merrill Lynch as of,

the date of its opinion. It should be understood that subsequent developments may affect BofA Merrill Lynch’s opinion, and BofA Merrill Lynch does not have any obligation to update, revise, or reaffirm its opinion. The issuance of BofA Merrill Lynch’s opinion was approved by a fairness opinion review committee of BofA Merrill Lynch.

The discussion set forth below in the section entitled “Summary of Material Financial Analyses of the Company” represents a brief summary of the material financial analyses presented by BofA Merrill Lynch to the board in connection with its opinion, dated August 1, 2017. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Merrill Lynch, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Merrill Lynch. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Merrill Lynch.

Summary of Material Financial Analyses of the Company

Selected Publicly Traded Companies Analysis. BofA Merrill Lynch reviewed publicly available financial and stock market information for the Company and the following nine publicly traded companies in the long term care, pharmacy benefit management, infusion/specialty pharmacy and pharmaceutical distribution industries that BofA Merrill Lynch considered to have similar or reasonably comparable operations to the Company, or that operate in the end markets served by the Company:

BofA Merrill Lynch reviewed, among other things, per share equity values, based on closing stock prices on July 31, 2017, of the selected publicly traded companies as a multiple of estimated adjusted earnings per share, which we refer to in this section as “EPS”, for calendar years 2017 and 2018. The overall low, mean, median and high calendar year 2017 EPS multiples observed for the selected publicly traded companies (disregarding companies that forecasted losses) were 9.0x, 13.3x, 14.0x and 24.5x, respectively, and the overall low, mean, median and high calendar year 2018 EPS multiples observed for the selected publicly traded companies (disregarding companies that forecasted losses) were 8.2x, 12.3x, 13.4x and 21.4x, respectively. BofA Merrill Lynch also reviewed enterprise values of the selected publicly traded companies, calculated as equity values based on closing stock prices on July 31, 2017, plus debt, plus minority interest, less cash, as a multiple of estimated earnings before interest, taxes, depreciation and amortization, which we refer to in this section as “EBITDA”, for calendar years 2017 and 2018. The overall low, mean, median and high calendar year 2017 EBITDA multiples observed for the selected publicly traded companies were 6.7x, 8.5x, 8.2x and 19.6x, respectively, and the overall low, mean, median and high calendar year 2018 EBITDA multiples observed for the selected publicly traded companies were 6.5x, 8.1x, 7.7x and 14.3x, respectively. In each case, the mean and median multiples excluded BioScrip, Inc. and Diplomat Pharmacy, Inc., which, in the judgment of BofA Merrill Lynch, were not representative of the group, given that only a minimal portion of their respective overall businesses would be directly comparable with the Company’s business. BofA Merrill Lynch then applied (i) calendar year 2017 EPS multiples of 11.5x to 14.5x derived from the selected publicly traded companies, based on BofA Merrill Lynch’s professional judgment, to the Company’s calendar year 2017 estimated EPS of $1.95 per share, and calendar year 2018 EPS multiples of 10.5x to 13.5x derived from the selected publicly traded companies, based on BofA Merrill Lynch’s professional judgment, to the Company’s 2018 estimated EPS

of $2.19 per share, and (ii) calendar year 2017 EBITDA multiples of 7.5x to 9.5x derived from the selected publicly traded companies, based on BofA Merrill Lynch’s professional judgment, to the Company’s calendar year 2017 estimated EBITDA of $142 million, and calendar year 2018 EBITDA multiples of 7.0x to 9.0x derived from the selected publicly traded companies, based on BofA Merrill Lynch’s professional judgment, to the Company’s calendar year 2018 estimated EBITDA of $159 million. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates, and estimated financial data of the Company were based on the Company management forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for the Company, as compared to the merger consideration:

No company used in this analysis is identical or directly comparable to the Company. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which the Company was compared.

Discounted Cash Flow Analysis. BofA Merrill Lynch performed a discounted cash flow analysis of the Company to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that the Company was forecasted to generate from the third fiscal quarter of 2017 through calendar year 2021 based on the Company management forecasts, both (i) without taking into account the present value of $33 million of federal NOL tax attributes as of June 30, 2017, and (ii) taking into account the present value of $33 million of federal NOL tax attributes as of June 30, 2017. BofA Merrill Lynch calculated terminal values for the Company by applying terminal last twelve months multiples of 7.5x to 9.5x, which range was selected based on BofA Merrill Lynch’s professional judgment and experience, to the Company’s estimated EBITDA for the last twelve months ending December 31, 2021. The cash flows and terminal values were then discounted to present value as of June 30, 2017, using discount rates ranging from 7.5% to 8.5%, which were based on an estimate of the Company’s weighted average cost of capital. This analysis indicated the following approximate implied per share equity value reference ranges for the Company as compared to the merger consideration:

Other Factors

BofA Merrill Lynch also noted certain additional factors that were not considered part of BofA Merrill Lynch’s material financial analyses with respect to its opinion but were referenced for informational purposes, including, among other things, the following:

Miscellaneous

As noted above, the discussion set forth above in the section entitled “Summary of Material Financial Analyses of the Company” is a summary of the material financial analyses presented by BofA Merrill Lynch to the board in connection with its opinion and is not a comprehensive description of all analyses undertaken or factors considered by BofA Merrill Lynch in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Merrill Lynch believes that its analyses summarized above must be considered as a whole. BofA Merrill Lynch further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Merrill Lynch’s analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

In performing its analyses, BofA Merrill Lynch considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company. The estimates of the future performance of the Company in or underlying BofA Merrill Lynch’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Merrill Lynch’s analyses. These analyses were prepared solely as part of BofA Merrill Lynch’s analysis of the fairness, from a financial point of view, of the merger consideration to be received in the merger by holders of shares of common stock, and were provided to the board in connection with the delivery of BofA Merrill Lynch’s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be BofA Merrill Lynch’s view of the actual values of the Company.

The type and amount of consideration payable in the merger was determined through negotiations between the parties, rather than by any financial advisor, and was approved by the board. The decision to enter into the merger agreement was solely that of the board. As described above, BofA Merrill Lynch’s opinion and analyses were only one of many factors considered by the board in its evaluation of the proposed merger and should not be viewed as determinative of the views of the board or management with respect to the merger or the merger consideration.

The Company has agreed to pay BofA Merrill Lynch for its services in connection with the merger an aggregate fee currently estimated to be approximately $6,000,000, $500,000 of which was payable upon delivery of its opinion and the remaining portion of which is contingent upon consummation of the merger. The Company also has agreed to reimburse BofA Merrill Lynch for its expenses incurred in connection with BofA Merrill Lynch’s engagement and to indemnify BofA Merrill Lynch, any controlling person of BofA Merrill Lynch and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws.

BofA Merrill Lynch and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Merrill Lynch and its affiliates may invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in equity, debt or other securities or financial instruments (including derivatives, bank loans or other obligations) of (i) the Company and certain of its affiliates and (ii) Parent and certain of its affiliates, including KKR and certain of its affiliates and portfolio companies and WBA and certain of its affiliates.

BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to the Company and certain of its affiliates, and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as administrative agent, bookrunner, collateral agent and arranger for, and/or

as a lender under, certain term loans, letters of credit, credit and leasing facilities and other credit arrangements of the Company and/or certain of its affiliates and (ii) having provided or providing certain treasury management products and services to the Company and/or certain of its affiliates. From August 1, 2015 through July 31, 2017, BofA Merrill Lynch and its affiliates derived aggregate revenues from the Company and certain of its affiliates of approximately $5 million for investment and corporate banking services.

In addition, BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide, investment banking, commercial banking and other financial services to Parent and certain of its affiliates, including KKR and certain of its affiliates and portfolio companies and WBA and certain of its affiliates, and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as financial advisor to KKR, certain of its affiliates and portfolio companies, WBA and an affiliate thereof in connection with certain mergers and acquisitions and divestiture transactions, (ii) having acted or acting as a bookrunning-manager, underwriter, stabilizing manager, global coordinator and/or initial purchaser for various debt and equity offerings of KKR, certain of its affiliates and portfolio companies and WBA, (iii) having acted or acting as a dealer for a commercial paper program of WBA and an affiliate thereof, (iv) having acted or acting as a dealer manager for certain debt exchange and tender offers of an affiliate and portfolio company of KKR and an affiliate of WBA, (v) having acted or acting as an administrative agent, bookrunner, collateral agent and/or arranger for, and/or as a lender under, certain term loans, letters of credit, credit and leasing facilities and other credit arrangements of Parent and/or certain of its affiliates, including KKR and/or certain of its affiliates and portfolio companies and WBA and/or certain of its affiliates (including acquisition financing), (vi) having provided or providing certain commodity, derivatives, foreign exchange and other trading services to Parent and/or certain of its affiliates, including KKR and/or certain of its affiliates and portfolio companies and WBA and/or certain of its affiliates, (vii) having acted or acting as a corporate broker to an affiliate and portfolio company of KKR and an affiliate of WBA, (viii) having provided or providing certain managed investments services and products to Parent and/or certain of its affiliates, including KKR and/or certain of its affiliates and portfolio companies and WBA and/or certain of its affiliates and (ix) having provided or providing certain treasury management products and services to Parent and/or certain of its affiliates, including KKR and/or certain of its affiliates and portfolio companies and WBA and/or certain of its affiliates. In addition, BofA Merrill Lynch and/or certain of its affiliates have maintained, currently are maintaining, and in the future may maintain, significant commercial (including vendor and/or customer) relationships with Parent and/or certain of its affiliates, including KKR and/or certain of its affiliates and portfolio companies and WBA and/or certain of its affiliates. From August 1, 2015 through July 31, 2017, BofA Merrill Lynch and its affiliates derived aggregate revenues from KKR and certain of its affiliates and portfolio companies of approximately $74 million, and from WBA and certain of its affiliates of approximately $49 million, for investment and corporate banking services.

Projected Financial Information

The Company does not as a matter of course make public projections as to future performance or earnings beyond the current fiscal year and is especially wary of making projections for extended earnings periods due to, among other reasons, the unpredictability and uncertainty of the underlying assumptions and estimates. However, we provided UBS and BofA Merrill Lynch with certain non-public financial forecasts prepared by PharMerica’s management at the request of the board, which UBS and BofA Merrill Lynch relied on in performing their financial analyses summarized under “Opinions of the Company’s Financial Advisors.”

PharMerica initially prepared financial projections, which we refer to as the “2015 Projections,” for the fiscal years 2015, 2016, 2017, 2018 and 2019. In April 2016, the 2015 Projections were updated, which updated projections we refer to as the “April 2016 Projections,” to reflect PharMerica’s then-recent performance, changes made to PharMerica’s budget for fiscal year 2016 as part of its monthly budgeting process and PharMerica management’s then-current expectations for fiscal year 2016. In September 2016, the April 2016 Projections were updated, which updated projections we refer to as the “September 2016 Projections,” to add projections for fiscal year 2020 and account for then-year-to-date performance and PharMerica management’s then-current expectations, reflecting, among other items, changes in bed count and the timing of certain contracts. In April 2017, the September 2016 Projections were updated, which updated projections we refer to as the “April 2017 Projections,” to reflect the expected impact of PharMerica’s acquisition of CareMed Specialty Pharmacy, to reflect the expected impact of the 21st Century Cures Act legislation, to use actual results for fiscal year 2016 as the base for the five-year projections and to add projections for fiscal year 2021. In July 2017, the April 2017 Projections were updated, which updated projections we refer to as the “July 2017 Projections,” to reflect actual results for the second quarter of fiscal year 2017.

The 2015 Projections were provided to KKR, Strategic Buyer 1, Strategic Buyer 2, Financial Buyer 1, Financial Buyer 2, Financial Buyer 3, Financial Buyer 4 and Financial Buyer 6. The April 2016 Projections were provided to KKR, WBA, Financial Buyer 1, Financial Buyer 2, Financial Buyer 4 and Financial Buyer 6. The September 2016 Projections and the April 2017 Projections were provided to KKR and WBA in the course of their due diligence. Each of the 2015 Projections, the April 2016 Projections, the September 2016 Projections, the April 2017 Projections and the July 2017 Projections were provided to the board, UBS and BofA Merrill Lynch, and the July 2017 Projections were approved by PharMerica for their use for purposes of their financial analyses summarized under “Opinions of the Company’s Financial Advisors.” None of the 2015 Projections, the April 2016 Projections, the September 2016 Projections or the April 2017 Projections were approved by PharMerica for use, or were used, for the purposes of the financial analyses summarized under “Opinions of the Company’s Financial Advisors.”

We have included a summary of the 2015 Projections, the April 2016 Projections, the September 2016 Projections, the April 2017 Projections and the July 2017 Projections, which we refer to as the “Projections,” below to give stockholders access to certain nonpublic information provided to the board, UBS and BofA Merrill Lynch for purposes of considering and evaluating the Company’s strategic and financial alternatives, including the merger. The inclusion of the Projections should not be regarded as an indication that Parent, Merger Sub or the board, UBS and BofA Merrill Lynch, or any other recipient of this information considered, or now considers, it to be an assurance of the achievement of future results.

The Projections and the underlying assumptions upon which the Projections were based are subjective in many respects. The Projections reflect numerous estimates and assumptions with respect to industry performance, general business, economic, market and financial conditions, changes to the business, financial condition or results of operations of the Company and other matters, including those described under “Cautionary Statement Concerning Forward-Looking Statements,” many of which are difficult to predict, subject to significant economic and competitive uncertainties, are beyond the Company’s control and may cause the Projections or the underlying assumptions to be inaccurate. Since the Projections cover multiple years, such information by its nature becomes less reliable with each successive year. The Projections do not take into account any circumstances or events occurring after the date they were prepared. As a result, there can be no assurance that the Projections will be realized or that actual results will not be significantly higher or lower than projected. The Projections were prepared for internal use and provided to our board, UBS and BofA Merrill Lynch, and not with a view toward public disclosure or toward complying with GAAP, the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. For example, certain metrics included in the Projections are non-GAAP measures, and the Projections do not include footnote disclosures as may be required by GAAP. Neither the Company’s independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.

Readers of this proxy statement are cautioned not to place undue reliance on the specific portions of the Projections below. No one has made or makes any representation to any stockholder regarding the information included in the Projections.

For the foregoing reasons, as well as the basis and assumptions on which the Projections were compiled, the inclusion of specific portions of the Projections in this proxy statement should not be regarded as an indication that such Projections will be an accurate prediction of future events, and they should not be relied on as such. Except as required by applicable securities laws, the Company does not intend to update, or otherwise revise the Projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error.

The following is a summary of the 2015 Projections that were provided to the board, UBS and BofA Merrill Lynch:

The following is a summary of the April 2016 Projections that were provided to the board, UBS and BofA Merrill Lynch:

The following is a summary of the September 2016 Projections that were provided to the board, UBS and BofA Merrill Lynch:

The following is a summary of the April 2017 Projections that were provided to the board, UBS and BofA Merrill Lynch:

The following is a summary of the July 2017 Projections that were provided to the board, UBS and BofA Merrill Lynch in connection with their respective consideration of the merger and for use for the purposes of the financial analyses summarized under “Opinions of the Company’s Financial Advisors”:

Financing

The Company and Parent anticipate the total amount of funds required to complete the merger and the related transactions and pay related fees and expenses will be funded through a combination of the following:

The consummation of the merger is not subject to any financing-related condition (although the funding of the debt financing is subject to the satisfaction of the conditions set forth in the debt commitment letter under which the debt financing will be provided).

Equity Financing

Parent has received equity commitment letters dated August 1, 2017 (the “equity commitment letters”) from each of KKR Americas XII and WBA pursuant to which they have committed, subject to the conditions set forth in the equity commitment letters, to provide Parent with equity financing in the aggregate of $450 million.

Funding of the equity financing is subject to the conditions provided in the equity commitment letters, which include:

The obligations of KKR Americas XII and WBA to fund the equity financing will terminate automatically and immediately upon the earliest to occur of:

The Company is an express third-party beneficiary of the rights granted to Parent under the equity commitment letters only for the purpose of seeking specific performance of Parent’s right to cause the equity commitments to be funded thereunder (solely to the extent that Parent can enforce the equity commitment pursuant to the terms thereof) and for no other purpose (including, without limitation, any claim for monetary damages thereunder).

Debt Financing

Parent has entered into an amended and restated debt commitment letter, dated as of August 4, 2017, which we refer to as the debt commitment letter, with Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, Jefferies Finance LLC, KKR Capital Markets LLC and KKR Corporate Lending LLC, which we refer to collectively as the lenders. Pursuant to the debt commitment letter, the lenders have committed to provide an aggregate of $1,100 million in debt financing to Parent consisting of: (i) a senior secured first lien term loan facility in an aggregate principal amount of $815 million; (ii) a senior secured revolving credit facility with a maximum availability of $100 million in the aggregate; and (iii) a senior secured second lien term loan facility in the aggregate amount of up to $185 million. We refer to the senior secured first lien term loan facility, the senior secured revolving credit facility and the senior secured second lien term loan facility, collectively, as the debt facilities.

The commitments under the debt commitment letter are made to Merger Sub or another wholly owned affiliate which is assigned such commitments pursuant to the terms of such debt commitment letter. Upon consummation of the merger, the surviving corporation will assume all of Merger Sub’s obligations under the debt facilities.

The commitment of the lenders under the debt commitment letter expires upon the earliest to occur of (i) prior to the consummation of the merger, the termination of the merger agreement by Parent or with Parent’s written consent or otherwise in accordance with its terms, (ii) the consummation of the merger without the funding of the debt facilities and (iii) the date that is five business days after the end date. The documentation governing the debt financing has not been finalized and, accordingly, the actual terms of the debt financing may differ from those described in this document. Parent has agreed to use reasonable best efforts to obtain the debt financing on the terms and conditions described in the debt commitment letter. If any portion of the debt financing becomes unavailable in the manner contemplated in the debt commitment letter, the merger agreement requires Parent to use its reasonable best efforts to arrange as promptly as practicable alternative debt financing on terms and conditions not less favorable to Parent, PharMerica and Merger Sub than those contained in the debt commitment letter and in an amount, combined with the aggregate amount of equity financing contemplated by the merger agreement and other funds available to Parent at the closing of the merger, sufficient to consummate the transactions contemplated by the merger agreement.

The availability of the debt facilities is subject, among other things, to:

As of the date hereof, no alternative financing arrangements or alternative financing plans have been made in the event that the debt financing described herein is not available. Although the debt financing described above is not subject to a due diligence or “market out,” such financing may not be considered assured.

Limited Guarantees

Subject to the terms and conditions set forth in the limited guarantees, KKR Americas XII and WBA have guaranteed the payment obligations of Parent with respect to the following (the “guaranteed obligations”):

KKR Americas XII’s and WBA’s obligations under the limited guarantees are subject to an aggregate cap equal to the sum of (i)(A) $56.6 million, if the Parent termination fee (but not the Willful Breach antitrust termination fee) is due under the merger agreement, or (B) $113.3 million, if the Willful Breach antitrust termination fee is due under the merger agreement, plus (ii) any interest expense in the event Parent fails to timely pay the Parent termination fee or the Willful Breach antitrust termination fee when due, plus (iii) Parent’s reimbursement and indemnification obligations under the merger agreement relating to financing cooperation.

The obligations of each of KKR Americas XII and WBA under their respective limited guarantees are limited to such party’s percentage (as set forth for each guarantor in the applicable limited guarantee) of the guaranteed obligations.

The limited guarantees will terminate, subject to certain exceptions, upon the earliest to occur of:

Interests of the Company’s Directors and Executive Officers in the Merger

In considering the recommendation of the board that you vote to approve the merger proposal, you should be aware that aside from their interests as stockholders of the Company, the Company’s directors and executive officers may have interests in the merger that are different from, or in addition to, those of other stockholders of the Company generally. Members of the board were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the transaction, and in unanimously recommending to the stockholders of the Company that the merger agreement be adopted. See the section entitled “The Merger (Proposal 1) — Background of the Merger” beginning on page 23 of this proxy statement and the section entitled “The Merger (Proposal 1) — Reasons for the Merger” beginning on page 31 of this proxy statement. The Company’s stockholders should take these interests into account in deciding whether to vote “FOR” the merger proposal. These interests are described in more detail below, and certain of them are quantified in the narrative and the table below.

Treatment of Company Equity Awards

Under the merger agreement, equity-based awards held by the Company’s directors and executive officers as of the effective time of the merger will be treated at the effective time of the merger as follows:

Company Stock Options. Except as otherwise agreed between Parent and any holder, each option to purchase shares of common stock granted under any employee or director plan (the “Company Plan”) outstanding immediately prior to the effective time, whether vested or unvested, will become fully vested and exercisable as of immediately prior to the effective time and will be cancelled in exchange for the right to receive a cash payment, subject to any required tax withholding, equal to the product of (i) the excess, if any, of the merger consideration over the applicable per share exercise price of such option multiplied by (ii) the number of shares of common stock subject to such option.

Company RSU Awards. Except as otherwise agreed between Parent and any holder, each restricted stock unit which has not vested or will not vest as of or prior to the effective time will, at the effective time, be cancelled and in substitution thereof, such holder will be eligible to receive a cash payment, subject to any required tax withholding, equal to the product of (i) the merger consideration multiplied by (ii) the number of shares of common stock subject to such unvested company stock unit (the “RSU Payment”). The RSU Payment will initially be unvested and will vest, subject to continued employment or service, based on the same vesting schedule applicable to such cancelled restricted stock unit, subject to any applicable vesting upon a termination

of the holder’s employment under the applicable Company Plan and award agreement that relates to the original restricted stock unit. Restricted stock units held by certain employees may become vested in connection with the merger and, in some cases, upon a qualifying termination of employment, pursuant to applicable award agreements or employment agreements or other contractual arrangements with the Company. The agreements with the named executive officers are described under the section entitled “Interests of the Company’s Directors and Executive Officers in the Merger – Change in Control and Severance Arrangements” beginning on page 55 of this proxy statement.

Company PSU Awards. Except as otherwise agreed between Parent and the holder thereof, each performance stock unit which has not vested or will not vest as of or prior to the effective time will, at the effective time, be cancelled and in substitution thereof, such holder will be eligible to receive a cash payment, subject to any required tax withholding, equal to the product of (i) the merger consideration multiplied by (ii) the number of shares of common stock subject to such unvested performance stock unit, calculated assuming target performance levels (the “PSU Payment”). The PSU Payment will initially be unvested and will vest, subject to continued employment or service, on the last day of the performance period applicable to such cancelled performance stock unit, subject to any applicable vesting upon a termination of the holder’s employment under the applicable Company Plan and award agreement that relates to the original performance stock unit. Performance stock units held by certain employees may become vested in connection with the merger and, in some cases, upon a qualifying termination of employment, pursuant to applicable award agreements or employment agreements or other contractual arrangements with the Company. The agreements with the named executive officers are described under the section entitled “Interests of the Company’s Directors and Executive Officers in the Merger – Change in Control and Severance Arrangements” beginning on page 55 of this proxy statement.

Quantification of Payments. For an estimate of the amounts that would be payable to each of the Company’s named executive officers on settlement of their unvested equity-based awards, see “Quantification of Payments and Benefits to the Company’s Named Executive Officers” below. We estimate that the aggregate amount that would be payable to the Company’s six non-employee directors for their unvested equity-based awards if the transaction were completed on December 15, 2017 is $4,262,807.

Change in Control and Severance Arrangements

Each of the Company’s current executive officers, with the exception of Berard Tomassetti, is party to a letter agreement or employment agreement that provides for enhanced severance benefits in the event of a qualifying termination of employment in connection with the occurrence of a change in control. Under their agreements, the merger would constitute a change in control.

In the event of Mr. Tomassetti’s termination of employment in connection with a change in control, his awards will be eligible for accelerated vesting and settlement in accordance with the terms of any applicable award agreements and equity incentive plans. Mr. Tomassetti is also party to an Agreement to Protect Company Assets under which Mr. Tomassetti has agreed to certain confidentiality, non-competition and non-solicitation provisions. This agreement provides for a severance payment upon his termination of employment by the Company without “cause”.

Agreement with Berard Tomassetti.

Under his Agreement to Protect Company Assets (“Protection Agreement”), Mr. Tomassetti is entitled to 52 weeks of Mr. Tomassetti’s then current base salary upon the termination of his employment by the Company without “cause”, with no special change in control provisions, and payment of awards in accordance with the terms of any applicable award agreements and equity incentive plans. The Protection Agreement defines “cause” as follows: (i) any act of personal dishonesty by Mr. Tomassetti; (ii) a violation by Mr. Tomassetti of his contractual or other legal obligations to the Company; (iii) a violation of Company policy; (iv) conviction of a felony; (v) failure to obey or carry out reasonable directives from a Company supervisor or manager which are consistent with Company policy and the terms and conditions of Mr. Tomassetti’s employment; or (vi) any act by Mr. Tomassetti that in the Company’s judgment causes potential liability, damage or other harm to the Company.

Letter Agreement with Gregory Weishar.

Under his letter agreement (“Letter Agreement”), subject to the satisfaction of a mutual release requirement, Mr. Weishar is entitled to the following payments upon a qualifying termination of his employment, either by the Company without “cause” or due to Mr. Weishar’s resignation with “good reason” in the following instances,

(i) after the Company has entered into a definitive agreement that would result in a change in control and such change in control occurs within six months after termination; (ii) at the request of a third party who has taken steps reasonably calculated to effect a change in control and such change in control occurs within six months after termination of employment; or (iii) within 24 months following a change in control:

of its employees generally, that remains uncured for 14 days following written request from the Board for cure; or his willful and material breach of the employment agreement that remains uncured for 14 days following written request from the Board for cure.

Employment Agreements with Robert Dries, Suresh Vishnubhatla, Thomas Caneris and Robert McKay

The employment agreements with each of Messrs. Dries, Vishnubhatla, Caneris and McKay (each an “Executive Employment Agreement” and collectively, the “Executive Employment Agreements”) provide for the following payments upon a qualifying termination of employment within one year following a change in control, either by the Company without “cause” or due to his resignation with “good reason”:

Section 4999 Excise Tax

Certain of our executive officers may be subject to the “golden parachute” excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”).

The Letter Agreement with Mr. Weishar provides for a “cutback,” such that, the amount of payments and benefits that Mr. Weishar otherwise would receive in connection with the merger would be reduced to the extent necessary to avoid imposition of the “golden parachute” excise tax.

Under his Executive Employment Agreement, Mr. Caneris is also entitled to (a) a “gross up” or reimbursement for the amount of any “golden parachute” excise tax imposed on Mr. Caneris as a result of payments and benefits received in connection with the merger (including, for example, the termination-related payments and benefits described above), if such payments and benefits exceed the applicable golden parachute threshold by 10% or more, or (b) a “cutback”. such that the amount of the payments and benefits that Mr. Caneris otherwise would receive in connection with the merger would be reduced to the extent necessary to avoid imposition of the “golden parachute” excise tax, if such taxes do not exceed the threshold by 10% or more.

The Executive Employment Agreement with Mr. McKay provides for a “cutback” such that, the amount of the payments and benefits that Mr. McKay otherwise would receive in connection with the merger would be reduced to the extent necessary to avoid imposition of the “golden parachute” excise tax.

For an estimate of the value of the payments and benefits described above that would be payable to each of the Company’s named executive officers, see “—Quantification of Payments and Benefits to the Company’s Named Executive Officers” below.

Potential Post Closing Arrangements with the Company

Prior to and since the announcement of the merger, KKR and WBA have had discussions with certain executive officers of the Company regarding potential post-closing employment and retention arrangements, and may enter into definitive agreements with them regarding their employment and related compensation and benefits following the closing of the merger. No such agreements have been entered into as of the date of this proxy statement, and there can be no assurances that the terms of any such agreements will be agreed with any of these executives in the future.

Indemnification and Insurance

The Company is party to indemnification agreements with each of its directors and executive officers that require the Company, among other things, to indemnify the directors and executive officers against certain liabilities that may arise by reason of their status or service as directors or officers. In addition, pursuant to the terms of the merger agreement, the Company’s directors and executive officers will be entitled to certain ongoing indemnification from the surviving corporation, as well as coverage under directors’ and officers’ liability insurance policies. Such indemnification and insurance coverage is further described in the section entitled “The Merger Agreement (Proposal 1)—Indemnification and Insurance” beginning on page 76 of this proxy statement.

Quantification of Payments and Benefits to the Company’s Named Executive Officers

The table below sets forth the amount of payments and benefits that each of the Company’s named executive officers would receive in connection with the transaction, assuming that the transaction were consummated and each such executive officer experienced a qualifying termination on December 15, 2017.

Golden Parachute Compensation

The cash payment to Mr. Tomassetti consists of a continued payment for 12 months of Mr. Tomassetti’s then current base salary upon the termination of his employment by the Company without “cause”.

Each performance stock unit held by the Company’s named executive officers that has not vested as of or prior to the effective time will, at the effective time, be cancelled and each holder will be eligible to receive a substitute cash payment that will initially be

unvested and will vest, subject to continued employment or service, on the last day of the performance period applicable to such cancelled performance stock unit, subject to any applicable vesting upon a termination of the holder’s employment under the applicable Company Plan and award agreement that relates to the original performance stock unit.

The restricted stock units held by the Company’s non-employee directors that have not vested as of or prior to the effective time will, at the effective time, fully vest on the closing of a change in control on a “single trigger” basis.

Material U.S. Federal Income Tax Consequences of the Merger

The following are the material U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of common stock. This discussion applies only to U.S. holders that hold common stock as capital assets within the meaning of Section 1221 of the Code. This discussion does not address the consequences of the merger to holders who receive cash pursuant to the exercise of appraisal rights. This discussion does not describe all of the tax consequences that may be relevant to a holder in light of the holder’s particular circumstances or to holders subject to special rules, such as: