Express Scripts Inc. (ESRX), one of the nation's largest pharmacy benefit managers, said Thursday it plans to buy specialty pharmaceutical distributor Priority Healthcare Corp. (PHCC) in a cash deal valued at $1.3 billion.

St. Louis-based Express Scripts said it will acquire Priority for $28 per share, an 8 percent premium from the $25.85 that Priority shares were trading at on Thursday on the Nasdaq Stock Market (search), near their 52-week high of $26.51.

The deal, expected to be completed in the fourth quarter, is subject to approval by regulators and Priority's shareholders.

Express Scripts said excluding write-offs of financing and merger costs, the deal isn't expected to affect the company's earnings this year and should increase earnings in 2006 by 3 cents or 4 cents per share. The company plans to pay for the purchase through a combination of cash and debt.

Priority, which is based in Lake Mary, Fla., and had $1.74 billion in revenue last year, would bulk up Express Script's existing pharmaceutical distribution subsidiary, CuraScript Pharmacy Inc. (search) , which is based in nearby Orlando. Together, the companies would have more than $3 billion in revenue, Express Scripts said.

"This acquisition strengthens CuraScript's position as one of the leaders in the specialty marketplace and reinforces our business model, which is built around the alignment of interests with clients and patients," Express Scripts president and CEO George Paz said in a statement.