AMERISOURCE DISTRIBUTION CORP, 424B1, 1996-05-22

AMERISOURCE DISTRIBUTION CORP
424B1, 1996-05-22
DRUGS, PROPRIETARIES & DRUGGISTS' SUNDRIES

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<PAGE> 1

4,800,000 SHARES
LOGO
COMMON STOCK

(PAR VALUE $0.01 PER SHARE)
------------------------

Of the 4,800,000 shares of Common Stock offered, 3,800,000 shares are being
offered hereby in the
United States and 1,000,000 shares are being offered in a concurrent
international offering outside the United States. The initial public offering
price and the aggregate underwriting discount per share will be identical for
both offerings. See "Underwriting".

Of the 4,800,000 shares of Common Stock offered, 1,500,000 shares are being
sold by the Company and 3,300,000 shares are being sold by the Selling
Stockholders. See "Selling Stockholders". The Company will not receive any of
the proceeds from the sale of the shares being sold by the Selling Stockholders.

The Common Stock has been approved for listing on the New York Stock
Exchange under the symbol "AAS", subject to official notice of issuance. The
Company expects the Common Stock to commence trading on the New York Stock
Exchange on May 28, 1996, or shortly thereafter. Currently, the Common Stock is
quoted on the Nasdaq National Market under the symbol "ASHC". On May 21, 1996,
the last reported sale price for the Company's Common Stock on the Nasdaq
National Market was $35.50 per share. See "Price Range of Common Stock and
Dividend Policy".

SEE "RISK FACTORS" ON PAGE 9 FOR CERTAIN CONSIDERATIONS RELEVANT TO AN
INVESTMENT IN THE COMMON STOCK.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------

<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) COMPANY(2) STOCKHOLDERS
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share......................... $35.00 $1.48 $33.52 $33.52
Total (3)......................... $168,000,000 $7,104,000 $50,280,000 $110,616,000
</TABLE>

- ---------------

(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.

(2) Before deducting estimated expenses of $980,000 payable by the Company.

(3) A Selling Stockholder has granted the U.S. Underwriters an option for 30
days to purchase up to an additional 570,000 shares at the initial public
offering price per share, less the underwriting discount, solely to cover
over-allotments. Additionally, a Selling Stockholder has granted the
International Underwriters a similar option with respect to an additional
150,000 shares as part of the concurrent international offering. If such
options are exercised in full, the total initial public offering price,
underwriting discount and proceeds to Selling Stockholders will be
$193,200,000, $8,169,600 and $134,750,400, respectively. See "Underwriting".
------------------------

The shares offered hereby are offered severally by the U.S. Underwriters,
as specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that
certificates for the shares will be ready for delivery in New York, New York on
or about May 28, 1996, against payment therefor in immediately available funds.

GOLDMAN, SACHS & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES
CORPORATION

SMITH BARNEY INC.
BEAR, STEARNS & CO. INC.
WHEAT FIRST BUTCHER SINGER
------------------------

The date of this Prospectus is May 22, 1996.
<PAGE> 2

LOGO

[INSERT MAP ON INSIDE FRONT COVER]

<TABLE>
<S> <C> <C>
NORTHEAST REGION WESTERN REGION
Harrisburg, PA Idaho Falls, ID
Springfield, MA Joplin, MO
Thorofare, NJ Minneapolis, MN
Phoenix, AZ
SOUTHERN REGION Portland, OR
Chattanooga, TN Sacramento, CA
Dallas, TX
Johnson City, TN CENTRAL REGION SPECIALTY PRODUCTS FACILITIES
Lynchburg, VA Columbus, OH Baltimore, MD
Miami, FL Louisville, KY Columbus, OH
Orlando, FL Mishawaka, IN
Paducah, KY Toledo, OH
</TABLE>

------------------------

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR THE
NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET
MAKING TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY ON THE NASDAQ NATIONAL
MARKET IN ACCORDANCE WITH RULE 10B-6a OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. SEE "UNDERWRITING."

2
<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the financial statements and related notes thereto included
elsewhere or incorporated by reference in this Prospectus. Investors should
carefully consider the information set forth under the heading "Risk Factors."
Unless otherwise indicated, the information in this Prospectus assumes that the
Underwriters' over-allotment options will not be exercised. The term "Common
Stock" referred to in this Prospectus is the Class A Common Stock, $0.01 par
value per share, Class B Common Stock, $0.01 par value per share, and Class C
Common Stock, $0.01 par value per share, of AmeriSource Health Corporation
("AmeriSource" or the "Company"). Investors will be purchasing shares of Class A
Common Stock, the Company's only class of voting stock. The Company conducts its
business through wholly-owned subsidiaries. Unless otherwise indicated, all
references in this Prospectus to the Company or AmeriSource shall mean the
Company and its subsidiaries on a consolidated basis. All industry statistics in
this Prospectus were obtained from data prepared or provided by the National
Wholesale Druggists' Association, an independent market research company and
other recognized industry sources.

THE COMPANY

AmeriSource is the fifth largest full-service wholesale distributor of
pharmaceutical products and related health care services in the United States.
The Company serves its customers nationwide through 20 drug distribution
facilities and two specialty products distribution facilities. AmeriSource is
typically the primary source of supply to its customers and offers a broad range
of services designed to enhance the operating efficiencies and competitive
position of its customers and suppliers. The Company benefits from a diverse
customer base that includes hospitals and managed care facilities (45%),
independent community pharmacies including retail drug stores, nursing homes and
clinics (36%), and chain drug stores including pharmacy departments of
supermarkets and mass merchandisers (19%).

Over the past five years, AmeriSource has significantly expanded its
national presence as a leading, innovative wholesale distributor, and has
achieved significant growth in revenues and adjusted operating income (as
defined herein). The Company's revenues have increased from $2.5 billion in the
fiscal year ended September 30, 1990 to $4.7 billion in the fiscal year ended
September 30, 1995, a compound annual growth rate of 13.5%, while adjusted
operating income increased from $43.8 million in fiscal 1990 to $98.0 million in
fiscal 1995, a compound annual growth rate of 17.5%. The Company's growth is
primarily the result of market share gains in existing markets, geographic
expansion, and overall industry growth. The Company believes it is well-
positioned to continue its revenue growth and increase operating income through
the execution of the following key elements of its business strategy:

- Expansion into New Geographic Markets. Since October 1993, the Company
has opened six new distribution facilities and has acquired two others.
These openings and acquisitions have substantially increased its
geographic coverage and its access to potential markets. In October 1993,
the Company opened a facility in Dallas, Texas, and in November 1994, the
Company opened two additional facilities in Portland, Oregon and
Springfield, Massachusetts. The Company opened facilities in Sacramento,
California, Phoenix, Arizona, and Orlando, Florida in June, October, and
December 1995, respectively. While each of these new facilities began
operations with an existing customer base in its regional marketplace,
the Company believes there is substantial opportunity to grow these
operations. The Company has also sought to expand geographically by
making selective acquisitions. In July 1995, the Company acquired Newbro
Drug Company, a regional wholesale pharmaceutical distributor based in
Idaho Falls, Idaho, and in February 1996, the Company acquired Gulf
Distribution Inc., a regional wholesale pharmaceutical distributor based
in Miami, Florida. Prior to the Acquisition (as defined herein) in 1988,
AmeriSource's management team completed 18

3
<PAGE> 4

acquisitions over a 10-year period. The Company believes that as industry
consolidation pressures continue, additional opportunities may arise to
selectively acquire local and regional drug wholesale companies
facilitating expansion into new geographic areas and enhancement of its
competitive position in existing markets.

- Increasing Market Share in Existing Markets. The Company believes that
it is well positioned to continue to grow in its existing markets by: (i)
providing superior distribution services and specialty value-added
programs that reduce its customers' and suppliers' cost of operations;
(ii) maintaining its low cost operating structure to ensure that the
Company's services are priced competitively in the marketplace; (iii)
continuing to focus on the higher growth hospital and managed care market
segment through the use of dedicated facilities and advanced information
systems; and (iv) maintaining its decentralized operating structure to
respond to customers' needs more quickly and efficiently and to ensure
the continued development of local and regional management talent. These
factors have allowed AmeriSource to compete effectively in the
marketplace, generate above industry average sales growth over the last
four years, and develop new customers, such as the federal government.

- Continuing Growth of Specialty Services. AmeriSource works closely with
both customers and suppliers to develop an extensive range of specialty
services. In addition to enhancing the Company's growth and
profitability, these services assist customers and suppliers in
maintaining and improving their market positions and strengthen the
Company's overall role in the health care distribution channel. These
services include:

-- ECHO(TM), the Company's proprietary software system, provides
sophisticated ordering and inventory management assistance to its
hospital and retail customers. In fiscal 1995, the Company acquired
LDS Liberty Drug Systems, a software developer based in Greensboro,
North Carolina. The technology acquired with this acquisition is
being combined with the ECHO(TM) systems to provide customers with a
complete system for tracking usage, reordering products, and managing
records. Since the introduction of ECHO(TM) in early fiscal 1991, the
Company has installed approximately 3,100 systems nationwide and
believes that its installed base of systems is one of the largest in
the wholesale drug industry.

-- Family Pharmacy(R) enables small chain and independent community
pharmacies to compete more effectively by providing innovative
marketing and merchandising programs and enhancing access to
pharmaceutical benefit programs of large health care provider groups.
Family Pharmacy(R) has grown dramatically in recent years, and as of
March 31, 1996 its 2,133 member-stores would in effect constitute one
of the largest drugstore chains in the United States.

-- Income Rx(R) provides an integral value-added service to hospital and
retail pharmacist customers by continually reviewing the marketplace
for generic pharmaceutical products that offer the best price,
quality, and availability.

-- American Health Packaging(SM) repackages pharmaceuticals from bulk
quantities into smaller units of use and unit dose measurements
thereby providing both hospital and retail customers with lower
product, inventory, and dispensing (labor) costs. The Company
recently expanded its packaging capacity with the opening of a new
53,000 square foot state-of-the-art packaging facility in Columbus,
Ohio. In recent months, the Company has begun packaging
pharmaceutical product for other drug wholesale distributors, in
addition to marketing products directly through its Income RePax(R)
program.

-- Health Services Plus distributes oncology and other specialty
products to clinics and physician groups on a national basis. Rita
Ann Distributors markets cosmetics and fragrances to chain drugstores
and other retail customers.

4
<PAGE> 5

- Maintaining Low Cost Operating Structure. AmeriSource has the lowest
operating cost structure among its four major national competitors. Over
the past five years, the Company has reduced its selling and
administrative expenses and depreciation as a percentage of revenues from
4.78% in fiscal 1990 to 3.61% in fiscal 1995. The Company continues to
achieve productivity and operating income gains from continued
investments in advanced management information systems, warehouse
automation technology, and from operating leverage due to above industry
average volume per facility. In fiscal 1995, the Company's average
revenue per pharmaceutical distribution facility was $258 million
compared to a calendar 1994 industry average of approximately $213
million.

The wholesale drug industry in the United States continues to experience
significant growth. Industry sales grew from $30 billion in 1990 to an estimated
$57 billion in 1995, a compound annual growth rate of 13.7%. Factors
contributing to this growth include an aging population, new product
introductions, the increased use of outpatient drug therapies, a higher
concentration of distribution through wholesalers by both manufacturers and
customers, and rising pharmaceutical prices. In response to rising health care
costs, governmental and private payors have adopted cost containment measures
that encourage the use of efficient drug therapies to prevent or treat diseases
instead of expensive prolonged hospital stays and surgical procedures. In
addition, drug wholesalers offer their customers and suppliers more efficient
distribution and inventory management. As a result, from 1980 to 1995, the
percentage of total pharmaceutical sales through wholesale drug distributors
increased from approximately 46% to approximately 61%. At the same time that
sales through the wholesale drug industry have grown, the number of
pharmaceutical wholesalers in the United States has decreased from 139 at the
end of 1980 to approximately 48 as of December 31, 1995. Industry analysts
expect this consolidation trend to continue, with the industry's largest
companies increasing their percentage of total industry sales. In 1995, the five
largest wholesale pharmaceutical distributors accounted for approximately 76% of
industry sales by pharmaceutical wholesalers.

The Company was formed to acquire Alco Health Services Corporation, a
public company listed on Nasdaq, in 1988 through a leveraged buy-out (the
"Acquisition"). The Company changed its name from Alco Health Distribution
Corporation to AmeriSource Distribution Company on July 15, 1994, and
subsequently to AmeriSource Health Corporation on March 30, 1995. In connection
with the Acquisition, the Company incurred approximately $545 million of
indebtedness, with a resulting high level of interest expense. Since the
Acquisition, the Company has refinanced all such indebtedness at substantially
lower interest rates. See "Risk Factors" and "Capitalization."

The address of the principal executive office of the Company is 300 Chester
Field Parkway, Malvern, Pennsylvania 19355, and its telephone number is (610)
296-4480.

5
<PAGE> 6

SUMMARY CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data and
other operating data of the Company for each of the five years in the period
ended September 30, 1995 and for the interim six-month periods ended March 31,
1996 and 1995. The summary financial data should be read in conjunction with
"Use of Proceeds," "Capitalization," "Selected Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the unaudited pro forma financial statements and related notes
thereto, and the audited and unaudited consolidated financial statements and
related notes thereto included elsewhere or incorporated by reference in this
Prospectus. Historical Statement of Operations Data, Earnings (Loss) Per Share,
and Balance Sheet Data for each of the five years in the period ended September
30, 1995 have been derived from audited financial statements. Historical
financial information for the interim six-month periods ended March 31, 1996 and
1995 has been derived from unaudited financial statements; however, in the
opinion of management, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of such information have been
included. The interim results of operations may not be indicative of the results
for the full fiscal year or for any other interim period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, MARCH 31,
-------------------------------------------------------------- -----------------------
1991 1992 1993 1994(1) 1995 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.................... $2,743,828 $3,237,708 $3,658,871 $4,182,193 $4,668,948 $2,307,131 $2,644,569
Gross profit................ 178,769 199,723 209,438 235,191 266,355 128,875 147,883
Operating expenses(2)....... 120,921 131,080 136,147 149,137 168,343 81,490 96,093
Operating income (loss)..... 45,887 60,850 65,601 (101,992) 97,835 47,305 51,674
Interest expense............ 72,208 71,025 66,696 62,611 52,288 31,989 19,002
Income (loss) before
extraordinary items and
cumulative effect of
accounting changes in
1994...................... (23,319) (12,824) (7,474) (172,417) 28,218 7,559 18,950
Net income (loss)........... (23,319) (6,476) (18,618) (207,671) 10,181 (4,316) 18,950
EARNINGS (LOSS) PER SHARE
(FULLY DILUTED):
Income (loss) per share
before extraordinary items
and cumulative effect of
accounting changes in
1994...................... $ (1.58) $ (0.87) $ (0.51) $ (11.69) $ 1.53 $ 0.51 $ 0.84
Net income (loss) per
share..................... $ (1.58) $ (0.44) $ (1.26) $ (14.08) $ 0.55 $ (0.29) $ 0.84
Weighted average common
shares outstanding (fully
diluted).................. 14,750 14,750 14,750 14,750 18,396 14,765 22,504
PRO FORMA DATA(3):
Operating income............ $ 97,835 $ 47,305 $ 51,674
Interest expense............ $ 37,710 $ 19,939 $ 17,322
Income before extraordinary
items..................... $ 37,286 $ 15,179 $ 19,949
Income per share before
extraordinary items (fully
diluted)(4),(5)........... $ 1.57 $ 0.64 $ 0.83
Weighted average common
shares outstanding (fully
diluted).................. 23,772 23,702 24,004
</TABLE>

6
<PAGE> 7

<TABLE>
<CAPTION>
AT MARCH 31, 1996
-----------------------------
AS
ACTUAL ADJUSTED(8)
---------- --------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Current assets...................................................................... $1,004,596 $1,004,596
Working capital..................................................................... 319,455 319,455
Total assets........................................................................ 1,083,132 1,083,132
Long-term debt...................................................................... 500,850 451,550
Stockholders' equity (deficit)...................................................... (110,377) (61,077)
</TABLE>

- ---------------
(1) Includes the effect of the $179.8 million write-off of the excess of cost
over net assets acquired ("goodwill"), the cumulative effect of accounting
changes for income taxes of $33.4 million and post-retirement benefits other
than pensions of $1.2 million.

(2) Represents selling and administrative expenses and depreciation, and
excludes amortization and unusual items.

(3) The pro forma data represents the historical data for the fiscal year ended
September 30, 1995 and the six months ended March 31, 1996 and 1995 adjusted
to give effect to the Offering, the refinancing transactions completed in
December 1994, the issuance of shares and use of proceeds from the initial
public offering of the Company's Common Stock in April 1995, and the option
exercises which occurred in April 1995, as if each transaction had occurred
on October 1, 1994. See "Use of Proceeds" and the unaudited pro forma
financial statements and related notes thereto included elsewhere in this
Prospectus.

(4) Assuming the current 1996 effective tax rate of 42%, pro forma income per
share before extraordinary items on a fully diluted basis would be $1.47 for
the fiscal year ended September 30, 1995.

(5) The $49,300 proceeds from the 1996 Offering are assumed to be used to repay
borrowings under the Credit Agreement. If the proceeds were assumed to be
used to purchase and retire Senior Debentures at a price of 112.75% of the
principal amount thereof (including fees) plus accrued interest, income per
share before extraordinary items on a fully diluted basis would be $1.61,
$0.66, and $0.85 for the year ended September 30, 1995 and the six months
ended March 31, 1995 and 1996, respectively. On May 20, 1996, the Company
commenced a tender offer and related consent solicitation with respect to
all of the outstanding Senior Debentures, whereby the Company has offered to
pay to tendering holders, subject to the fulfillment of certain conditions,
110.25% of the principal amount plus accrued interest thereof and a consent
fee equal to two percent of the principal amount thereof. There can be no
assurances that the Company will be able to purchase the Senior Debentures
pursuant to the tender offer or otherwise. See "Use of Proceeds."

(6) Adjusted operating income is defined as operating income plus amortization
of intangibles for each period, plus a $5.5 million stock option
compensation charge in fiscal 1991, a $2.2 million non-recurring charge
primarily relating to facility consolidation costs in each of fiscal 1992
and fiscal 1993, a $4.1 million environmental remediation charge in fiscal
1994, and the $179.8 million write-off of goodwill in fiscal 1994. Adjusted
operating income is not an alternative to operating income or cash flows (as
determined under generally accepted accounting principles) as an indicator
of operating and cash flow performance and should be read in conjunction
with the Selected Consolidated Financial Data and the Company's audited and
unaudited consolidated financial statements and related notes thereto
included elsewhere or incorporated by reference in this Prospectus. The
Company believes adjusted operating income provides investors with an
evaluation of the Company's historical results of operations on a comparable
basis, since the unusual items noted above were incurred in some historical
periods, but not in others. The presentation of adjusted operating income
should not be interpreted to suggest that the Company will not incur similar
unusual items in the future.

(7) Adjusted operating income divided by rolling 12 month average balances of
major working capital accounts (cash, accounts receivable, inventory, and
accounts payable) and property and equipment(net).

(8) Represents the historical data as of March 31, 1996 adjusted to give effect
to the Offering as if it occurred on March 31, 1996, and assuming the sale
in the Offering of 1,500,000 shares of Common Stock offered by the Company
at an initial public offering price of $35.00 per share, after deducting
estimated underwriting discounts and commissions and estimated offering
expenses. See "Use of Proceeds," "Capitalization," and the unaudited pro
forma financial statements and related notes thereto included elsewhere in
this Prospectus.

7
<PAGE> 8

THE OFFERING

<TABLE>
<CAPTION>
SELLING
COMPANY STOCKHOLDERS(1)(2) TOTAL
---------- ------------------ ----------
<S> <C> <C> <C>
Common Stock offered by:
U.S. Offering (number of shares)........... 1,200,000 2,600,000 3,800,000
International Offering (number of
shares)................................. 300,000 700,000 1,000,000
--------- --------- ---------
TOTAL.............................. 1,500,000 3,300,000 4,800,000
Common Stock to be outstanding after the
Offering(3)................................ 23,670,686 shares
Use of Proceeds(2)........................... To repay or repurchase certain long-term
indebtedness and for general corporate
purposes, including working capital. See "Use
of Proceeds."
Nasdaq National Market Symbol(4)............. ASHC
</TABLE>

- ---------------
(1) Does not include up to 720,000 shares of Common Stock that may be sold by a
Selling Stockholder pursuant to the over-allotment options granted to the
Underwriters. See "Underwriting."

(2) The Company will not receive any of the proceeds from the sale of Common
Stock by the Selling Stockholders. See "Selling Stockholders."

(3) Based on shares outstanding as of March 31, 1996. Does not include up to
1,186,500 shares of Common Stock that may be issued upon the exercise of
outstanding options granted under the Company's employee and director stock
option plans. Also does not include 37,036 shares of Common Stock reserved
for issuance upon exercise of options available for future grant under the
Company's employee and director stock option plans. The Company expects,
subject to stockholder approval, to amend its current stock option plans to
increase the number of shares that may be issued under such plans.

(4) The Common Stock has been approved for listing on the New York Stock
Exchange under the symbol "AAS," subject to official notice of issuance. The
Company expects the Common Stock to commence trading on the New York Stock
Exchange on May 28, 1996, or shortly thereafter.

RISK FACTORS

See "Risk Factors" for a discussion of certain factors that should be
considered by prospective investors.
------------------------

Family Pharmacy(R), Income Rx(R), and Income RePax(R) are registered
trademarks, ECHO(TM) is a trademark, and American Health PackagingSM is a
service mark of the Company.

This Prospectus does not constitute an offer to sell or the solicitation of
an offer to buy the shares of Common Stock in any jurisdiction in which such
offer or solicitation is unlawful. There are restrictions on the offer and sale
of the shares of Common Stock in the United Kingdom. All applicable provisions
of the Financial Services Act 1986 and the Companies Act 1985 with respect to
anything done by any person in relation to the shares of Common Stock in, from,
or otherwise involving the United Kingdom must be complied with. See
"Underwriting."

In this Prospectus, reference to "dollars," "U.S. $" and "$" are United
States dollars.

8
<PAGE> 9

RISK FACTORS

Prospective purchasers of the Common Stock offered hereby should consider
carefully the specific risk factors set forth below as well as the other
information set forth elsewhere and incorporated by reference in this
Prospectus. Certain information set forth elsewhere or incorporated by reference
herein contains forward-looking statements as such term is defined in Section
27A of the Securities Act of 1933 (the "Securities Act") and Section 21E of the
Securities Exchange Act of 1934 (the "Exchange Act"). Certain factors as
discussed herein could cause actual results to differ materially from those in
the forward-looking statements.

FINANCIAL LEVERAGE

In connection with the Acquisition, the Company incurred approximately $545
million of indebtedness, with a resulting high level of interest expense. Since
the Acquisition, the Company has refinanced all its indebtedness at
substantially lower interest rates. As of March 31, 1996, the Company's
aggregate long-term indebtedness was $501 million and its stockholders' deficit
was $110 million. After giving effect to the Offering, on a pro forma basis as
of March 31, 1996, the Company's aggregate long-term indebtedness would have
been approximately $452 million. Although the application of the proceeds of the
Offering will reduce the Company's indebtedness, the terms of the Company's
financing agreements contain numerous financial and operating covenants and
prohibitions, including requirements that the Company satisfy certain financial
ratios and maintain certain specified levels of net worth. In addition, the
Company is more highly leveraged than certain of its competitors, which may
place the Company at a competitive disadvantage, and certain of the Company's
borrowings are at a floating rate of interest, which causes the Company to be
more vulnerable to increases in interest rates. See "Capitalization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

COMPETITION

The wholesale distribution of pharmaceuticals, health and beauty aids, and
other healthcare products is highly competitive. The Company competes with
numerous national and regional distributors, some of which are larger and have
substantially greater financial resources than the Company. The Company's
national competitors include Bergen Brunswig Corporation, Cardinal Health, Inc.,
FoxMeyer Health Corporation, and McKesson Corporation. In addition, the Company
competes with local distributors, direct-selling manufacturers, and other
specialty distributors. Competitive factors include price, service and delivery,
credit terms, breadth of product line, customer support, and marketing programs.
In part due to competitive pressures, the Company's gross profit margins have
declined from 6.52% in fiscal 1991 to 5.70% in fiscal 1995. There can be no
assurance that the Company will not encounter increased competition in the
future that could adversely affect the Company's business. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

DEPENDENCE ON KEY PERSONNEL

The Company is dependent on its senior and regional management, the loss of
certain of whom could adversely affect the Company. No member of the Company's
management is currently subject to an employment contract. There can be no
assurance that, over time, the Company will be able to retain all of its senior
and regional managers.

EXPANSION THROUGH ACQUISITIONS

The Company intends to expand into new and contiguous geographic markets
and to expand its market share in existing markets, in part through selected
acquisitions of drug wholesalers. Since the initial public offering of the
Company's Common Stock on April 4, 1995, the Company has acquired the capital
stock of Gulf Distribution Inc. and substantially all of the assets of Newbro
Drug

9
<PAGE> 10

Company, regional wholesale pharmaceutical distributors based in Miami, Florida
and Idaho Falls, Idaho, respectively. There can be no assurance that additional
suitable acquisition candidates will be identified in the future, that
acquisitions can be consummated on acceptable terms or that any acquired
companies can be integrated successfully into the Company's operations. No
substantive acquisition negotiations by the Company are currently pending, and
the Company currently has no commitments, understandings or arrangements with
respect to any specific acquisition. In addition, the Amended and Restated
Credit Agreement dated December 13, 1994 among the Company and its senior
lenders providing for the Company's $380 million revolving credit facility (the
"Credit Agreement") contains restrictions on the Company's ability to make
acquisitions.

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

No prediction can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the Common Stock prevailing from time to time. Sales of substantial
amounts of Common Stock, or the perception that such sales could occur, could
adversely affect prevailing market prices of the Common Stock. VPI and certain
holders of Common Stock (collectively, the "Registration Rights Holders") were
granted piggyback registration rights with respect to the Common Stock when they
purchased their shares. After the Offering, of the 23,670,686 shares of Common
Stock outstanding, an aggregate of approximately 7.0 million shares of Common
Stock owned by the Registration Rights Holders will be entitled to piggyback
registration rights. In addition, VPI, which will hold in the aggregate
approximately 6.7 million shares of Common Stock after the Offering, has been
granted demand rights to require the registration of its shares. In addition,
the Company, VPI, and certain executive officers and directors of the Company
which will hold in the aggregate approximately 7.8 million shares of Common
Stock after the Offering have agreed, except as described below, that, during
the period beginning from the date of this Prospectus and continuing to and
including the date 90 days after the date of the Prospectus, they will not
offer, sell, contract to sell or otherwise dispose of any securities of the
Company (other than pursuant to employee stock option plans existing, or on the
conversion or exchange of convertible or exchangeable securities outstanding, on
the date of this Prospectus) which are substantially similar to the shares of
the Common Stock or which are convertible or exchangeable into securities which
are substantially similar to the shares of Common Stock without the prior
written consent of the Underwriters, except for the shares of Common Stock
offered in connection with the concurrent U.S. and international offerings. Such
consent may be provided without prior notice to holders of the Common Stock or
to the markets where such securities are traded. The Underwriters have agreed
that Messrs. McNamara, Flowers, Hilzinger and Yost may sell up to 150,000,
32,000, 25,000 and 35,000 shares, respectively, after 30 days following the date
of the Prospectus. See "Shares Eligible for Future Sale."

10
<PAGE> 11

USE OF PROCEEDS

The net proceeds to the Company from the sale of 1,500,000 shares of Common
Stock offered by the Company hereby are estimated to be approximately $49.3
million at a public offering price of $35.00 per share and after deduction of
estimated underwriting discounts and commissions and estimated offering expenses
payable by the Company. The Company will not receive any proceeds from the sale
of shares of Common Stock by the Selling Stockholders.

The Company intends to utilize the net proceeds from the Offering to reduce
its long-term indebtedness. The Company will use the net proceeds initially to
reduce indebtedness incurred under the Credit Agreement. Subject to market
conditions, the Company may use the net proceeds to repurchase some or all of
the outstanding 11 1/4% Senior Debentures due 2005 (the "Senior Debentures")
through open market purchases, private transactions, or by tender offer. On May
20, 1996, the Company commenced a tender offer and related consent solicitation
with respect to all of the outstanding Senior Debentures, whereby the Company
has offered to pay to tendering holders, subject to the fulfillment of certain
conditions, 110.25% of the principal amount thereof plus accrued interest and a
consent fee equal to two percent of the principal amount thereof. There can be
no assurances that the Company will be able to purchase the Senior Debentures
pursuant to the tender offer or otherwise. The Senior Debentures mature on
August 1, 2005, and are first redeemable on July 15, 1998 at a price of 105.62%
of the aggregate principal amount thereof plus accrued and unpaid interest
thereon.

As of May 17, 1996, $225 million was outstanding under the Credit
Agreement. Borrowings under the Credit Agreement mature on January 3, 2000 and
currently accrue interest at the rate of approximately 6.7% per annum. Amounts
will be drawn under the Credit Agreement for general corporate purposes,
including working capital.

The pro forma capitalization table set forth herein (see "Capitalization")
reflects the Company's expectation that all of the net proceeds of the Offering
will initially be applied to repay a portion of the indebtedness outstanding
under the Credit Agreement.

11
<PAGE> 12

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Common Stock has been approved for listing on the New York Stock
Exchange under the symbol AAS, subject to official notice of issuance. The
Company expects the Common Stock to commence trading on the New York Stock
Exchange on May 28, 1996, or shortly thereafter. The Common Stock has been
traded in the over-the-counter market and quoted on the Nasdaq National Market
under the symbol ASHC since April 4, 1995. Prior to that there was no public
market for the Common Stock. The following table sets forth the high and low
closing sale prices of the Common Stock as reported on the Nasdaq National
Market for the periods indicated.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
YEAR ENDED SEPTEMBER 30, 1995
Third Quarter (April 4 through June 30).................................... $24 1/2 $20 3/4
Fourth Quarter............................................................. 27 3/4 19 3/4
YEAR ENDED SEPTEMBER 30, 1996
First Quarter.............................................................. $34 1/4 $25 1/4
Second Quarter............................................................. 34 28
Third Quarter (through May 21)............................................. 37 1/2 32 1/2
</TABLE>

See the cover page of this Prospectus for a recent last reported sale price
for the Common Stock on the Nasdaq National Market. As of March 31, 1996, the
Common Stock was held by approximately 2,700 stockholders of record or through
nominee or street name accounts with brokers.

Payment of dividends is within the discretion of the Company's Board of
Directors and will depend, among other factors, upon the Company's earnings,
financial condition and capital requirements, and the terms of the Company's
financing agreements. The Company plans to retain future earnings for use in the
business and, accordingly, the Company does not anticipate paying dividends in
the foreseeable future. The Company has not paid any cash dividends to its
stockholders. Moreover, the terms of the Credit Agreement restrict the ability
of the Company to make dividend payments unless certain financial tests are met.

12
<PAGE> 13

CAPITALIZATION

The following table sets forth the unaudited capitalization of the Company
as of March 31, 1996 on an actual basis and as adjusted to reflect the sale in
the Offering of 1,500,000 shares of Common Stock offered by the Company at an
initial public offering price of $35.00 per share and after deduction of
estimated underwriting discounts and estimated offering expenses payable by the
Company. This table should be read in conjunction with the audited and unaudited
consolidated financial statements of the Company and related notes thereto, the
unaudited pro forma financial statements and related notes thereto, and "Use of
Proceeds" included elsewhere or incorporated by reference in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
----------------------------
ACTUAL AS ADJUSTED(1)
--------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long-term debt:
Revolving credit facility..................................... $ 215,000 $ 165,700
Receivables securitization financing(2)....................... 209,860 209,860
11 1/4% Senior Debentures(3).................................. 74,293 74,293
Other debt.................................................... 1,697 1,697
--------- ---------
Total long-term debt.................................. $ 500,850 $ 451,550
Stockholders' equity (deficit):
Common stock, $0.01 par value per share:
Class A (voting and convertible): 50,000,000 shares
authorized; 12,346,288 shares issued, 17,146,288 as
adjusted ................................................ $ 124 $ 172
Class B (non-voting and convertible): 15,000,000 shares
authorized; 12,846,041 shares issued, 9,546,041 as
adjusted................................................. 128 95
Class C (non-voting and convertible): 2,000,000 shares
authorized; 279,439 shares issued, as adjusted........... 3 3
Capital in excess of par value................................ 171,441 220,726
Retained earnings (deficit)................................... (275,853) (275,853)
Cost of common stock in treasury(4)........................... (6,220) (6,220)
--------- ---------
Total stockholders' equity (deficit)....................... $(110,377) $ (61,077)
--------- ---------
Total capitalization.................................. $ 390,473 $ 390,473
========= =========
</TABLE>

- ---------------
(1) Adjusted to reflect the Offering. Assumes the application of $49.3 million
of the net proceeds from the Offering to repay borrowings under the Credit
Agreement.

(2) Comprises the Certificates (as defined herein) outstanding under the
Receivables Program (as defined herein), which represent fractional
undivided interests in the Receivables (as defined herein) and other assets
of the master trust, and do not otherwise represent recourse obligations of
the Company.

(3) In April 1996, the Company repurchased an aggregate principal amount of
approximately $27 million of 11 1/4% Senior Debentures in the open market.
Subject to market conditions, the Company may use the net proceeds of the
Offering to repurchase some or all of the remaining outstanding Senior
Debentures through open market purchases, private transactions, or by tender
offer. On May 20, 1996, the Company commenced a tender offer and related
consent solicitation with respect to all of the outstanding Senior
Debentures, whereby the Company has offered to pay to tendering holders,
subject to the fulfillment of certain conditions, 110.25% of the principal
amount thereof plus accrued interest and a consent fee equal to two percent
of the principal amount thereof. See "Use of Proceeds."

(4) Includes 351,082 shares of Class A and 2,950,000 shares of Class B Common
Stock, respectively.

13
<PAGE> 14

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data and
other operating data of the Company. The statement of operations data and
balance sheet data are derived from the audited and unaudited consolidated
financial statements of the Company. The selected consolidated financial and
operating data for the interim six-month periods ended March 31, 1996 and 1995
are unaudited; however, in the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of such information have been included. The interim results of
operations may not be indicative of the results for the full fiscal year or for
any other interim period. The selected consolidated financial data should be
read in conjunction with the audited and unaudited consolidated financial
statements and related notes thereto and the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere or
incorporated by reference in this Prospectus.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, MARCH 31,
-------------------------------------------------------------- -----------------------
1991 1992 1993 1994(1) 1995 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................. $2,743,828 $3,237,708 $3,658,871 $4,182,193 $4,668,948 $2,307,131 $2,644,569
Gross profit......................... 178,769 199,723 209,438 235,191 266,355 128,875 147,883
Operating expenses(2)................ 120,921 131,080 136,147 149,137 168,343 81,490 96,093
Operating income (loss).............. 45,887 60,850 65,601 (101,992) 97,835 47,305 51,674
Interest expense..................... 72,208 71,025 66,696 62,611 52,288 31,989 19,002
Income (loss) before extraordinary
items and cumulative effect of
accounting changes in 1994......... (23,319) (12,824) (7,474) (172,417) 28,218 7,559 18,950
Net income (loss).................... (23,319) (6,476) (18,618) (207,671) 10,181 (4,316) 18,950
EARNINGS (LOSS) PER SHARE (FULLY
DILUTED):
Income (loss) per share before
extraordinary items and cumulative
effect of accounting changes in
1994............................... $ (1.58) $ (0.87) $ (0.51) $ (11.69) $ 1.53 $ 0.51 $ 0.84
Net income (loss) per share.......... $ (1.58) $ (0.44) $ (1.26) $ (14.08) $ 0.55 $ (0.29) $ 0.84
Weighted average common shares
outstanding (fully diluted)........ 14,750 14,750 14,750 14,750 18,396 14,765 22,504
OTHER OPERATING DATA:
Adjusted operating income(3)......... $ 57,848 $ 68,643 $ 73,291 $ 86,054 $ 98,012 $ 47,385 $ 51,790
Adjusted operating income as a % of
revenues........................... 2.11% 2.12% 2.00% 2.06% 2.10% 2.05% 1.96%
Number of Rx distribution facilities
at end of period................... 18 17 15 14 18 15 20
Average revenue per Rx distribution
facility........................... $ 151,539 $ 189,718 $ 242,966 $ 297,136 $ 257,783 -- --
</TABLE>

14
<PAGE> 15

<TABLE>
<CAPTION>
AT SEPTEMBER 30, AT MARCH 31,
-------------------------------------------------------------- -----------------------
1991 1992 1993 1994 1995 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents and
restricted cash.................... $ 33,796 $ 13,806 $ 27,136 $ 25,311 $ 46,809 $ 63,097 $ 69,935
Accounts receivable -- net........... 221,383 249,070 251,999 272,281 318,652 286,474 340,272
Merchandise inventories.............. 270,977 336,025 346,371 351,676 404,522 424,121 590,675
Property and equipment -- net........ 36,203 38,105 36,106 41,182 45,244 42,073 50,553
Total assets......................... $ 783,145 $ 848,474 $ 867,944 $ 711,644 $ 838,673 $ 840,339 $1,083,132
Accounts payable..................... $ 254,013 $ 308,097 $ 379,826 $ 449,991 $ 462,804 $ 424,231 $ 609,607
Long-term debt....................... 570,939 587,983 549,220 487,575 435,764 645,209 500,850
Stockholders' equity................. (68,271) (74,747) (93,040) (300,726) (135,724) (306,198) (110,377)
Total liabilities and stockholders'
equity............................. $ 783,145 $ 848,474 $ 867,944 $ 711,644 $ 838,673 $ 840,339 $1,083,132
</TABLE>

- ---------------
(1) Includes the effect of: the $179.8 million write-off of the excess of cost
over net assets acquired ("goodwill"), the cumulative effect of accounting
changes for income taxes of $33.4 million and post-retirement benefits other
than pensions of $1.2 million.

(2) Represents selling and administrative expenses and depreciation, and
excludes amortization and unusual items.

(3) Adjusted operating income is defined as operating income plus amortization
of intangibles for each period, plus a $5.5 million stock option
compensation charge in fiscal 1991, a $2.2 million non-recurring charge
primarily relating to facility consolidation costs in each of fiscal 1992
and fiscal 1993, a $4.1 million environmental remediation charge in fiscal
1994, and the $179.8 million write-off of goodwill in fiscal 1994. Adjusted
operating income is not an alternative to operating income or cash flows (as
determined under generally accepted accounting principles) as an indicator
of operating and cash flow performance and should be read in conjunction
with the Company's audited and unaudited consolidated financial statements
and related notes thereto incorporated by reference in this Prospectus. The
Company believes adjusted operating income provides investors with an
evaluation of the Company's historical results of operations on a comparable
basis, since the unusual items noted above were incurred in some historical
periods, but not in others. The presentation of adjusted operating income
should not be interpreted to suggest that the Company will not incur similar
unusual items in the future.

15
<PAGE> 16

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain information set forth or incorporated by reference herein contains
forward-looking statements as such term is defined in Section 27A of the
Securities Act and Section 21E of the Exchange Act. Certain factors as discussed
in "Risk Factors" could cause actual results to differ materially from those in
the forward-looking statements.

The following discussion should be read in conjunction with the Company's
audited consolidated financial statements and related notes thereto incorporated
by reference in this Prospectus.

RESULTS OF OPERATIONS

SIX MONTHS ENDED MARCH 31, 1996 COMPARED WITH SIX MONTHS ENDED MARCH 31, 1995

For the six months ended March 31, 1996, revenues were $2.6 billion, an
increase of $337.4 million or 15% compared to the prior year. The year-to-year
revenue gains reflect increases across all customer groups, the impact of the
Company's expansion into new geographic markets, especially in the western and
northeastern United States, and price increases. Revenues of the Company's
western region increased by 43% in the first six months of fiscal 1996. The
acquisitions of Newbro Drug Company in July 1995 and Gulf Distribution Inc. in
February 1996 accounted for 2% of the 15% increase in revenues for the first six
months of fiscal 1996. During the six months ended March 31, 1996, sales to
hospitals increased 5%, sales to independent drug store customers increased 24%,
and sales to the chain drug store customer group increased 21%, as compared with
the prior fiscal year. During the six months ended March 31, 1996 sales to
hospitals accounted for 43% of total revenues, while sales to independent drug
stores accounted for 37% and sales to chain drug stores 20% of the total.

Gross profit of $147.9 million in the first six months of fiscal 1996
increased by 14.8% over 1995 due to the increase in revenues and gross profit
margin expansion. As a percentage of revenues, the gross profit margin in the
second fiscal quarter of fiscal 1996 was 5.74% as compared to 5.57% in the prior
year. For the six months ended March 31, 1996, the gross margin percentage of
5.59% was unchanged from the prior year. The increase in gross profit margin
percentage from the prior year second quarter was due to increased sales of
higher margin generic drugs, the continued introduction of new marketing
programs with manufacturers, the growth of higher margin specialty businesses
such as pharmaceutical repackaging, and an increase in inventory investment
buying activity, offset in part by a decline in selling margin due to continuing
price competition throughout the industry.

For the first six months of fiscal 1996, operating expenses increased $14.6
million or 18% compared to the prior year and represented 3.64% of revenues
versus 3.54% of revenues in the prior year. The increase as a percentage of
revenue in fiscal 1996 is primarily due to the cost of opening new distribution
facilities in Orlando, Florida, and Phoenix, Arizona, integration costs related
to Newbro Drug Company and Gulf Distribution Inc., above average growth of the
higher cost to service independent drug store segment, and the cost of
developing new value added marketing programs. These costs have been offset in
part by continued economies of scale at the Company's established locations.

Operating income of $27.3 million in the second quarter of fiscal 1996
increased by 8% over the prior year. For the six months ended March 31, 1996
operating income increased by $4.4 million or 9% compared to the prior year. As
a percentage of revenues, the Company's operating margin declined to 1.95% in
fiscal 1996 from 2.05% in fiscal 1995 due to the increase in expenses discussed
above. The Company is evaluating its distribution network to identify
opportunities for increased efficiencies and cost reduction necessary to
maintain and grow its operating margin.

For the six month period ended March 31, 1996 interest expense declined by
$13.0 million or 41% versus the prior year six month period. The decrease was
due to the redemption, in January

16
<PAGE> 17

1995 of the $166.1 million of 14 1/2% senior subordinated notes, the redemption,
in May 1995, of $74.3 million of 11 1/4% senior debentures, and lower average
borrowing rates due to the implementation of the receivables securitization
financing in December 1994 and reductions in the borrowing rates of the
Company's revolving credit facility which was amended in December 1994. Average
borrowings during the quarter ended March 31, 1996 were $522 million as compared
to average borrowings of $673 million in the prior year second quarter. For the
six months ended March 31, 1996, average borrowings were $486 million versus
average borrowings of $623 million in the prior year.

The income tax provisions for the six months ended March 31, 1996 were
computed based on an estimate of the full year effective tax rate. The
extraordinary charge in fiscal 1995 of $15.6 million, net of a tax benefit of
$3.7 million, relates to the amendment of the revolving credit facility and the
redemption of the 14 1/2% senior subordinated notes and the consequent write-off
of unamortized financing fees and redemption premiums paid in the prior year.

YEAR ENDED SEPTEMBER 30, 1995 COMPARED WITH YEAR ENDED SEPTEMBER 30, 1994

Revenues of $4.7 billion for the fiscal year ended September 30, 1995
represented an increase of 11.6% over the $4.2 billion in revenues for the
fiscal year ended September 30, 1994. The year-to-year revenue gains reflect
increases across all customer groups, the impact of the Company's expansion into
new geographic markets, especially in the northeastern and western United
States, and price increases. During the fiscal year ended September 30, 1995,
sales to hospitals increased 11%, sales to independent drug store customers
increased 13%, and sales to the chain drug store customer group increased 11%,
as compared with the prior fiscal year. During the twelve months ended September
30, 1995, sales to hospitals, independent drug stores and chain drug stores
accounted for 47%, 35% and 18%, respectively, of total revenues.

Gross profit of $266.4 million for fiscal 1995 increased by 13.3% over
fiscal 1994, primarily due to the increase in revenues. As a percentage of
revenues, the Company's gross profit margin expanded to 5.70% from 5.62% in
fiscal 1994. The gross profit margin improvement was a result of increased sales
of higher margin generic drugs, the continued introduction of new marketing
programs with manufacturers, and growth of higher margin specialty businesses,
such as pharmaceutical packaging. Increased purchase discounts and a greater
level of price increases from manufacturers resulted in greater inventory
appreciation which also benefited the gross profit margin.

Selling and administrative expenses and depreciation for fiscal 1995 were
$168.3 million compared to $149.1 million for fiscal 1994, an increase of 12.9%.
The increase in fiscal 1995 is due primarily to increases in warehouse and
delivery expenses relating to the volume increases, development expenses of
value-added programs, and one-time costs associated with the opening of new
distribution facilities in Springfield, Massachusetts, Portland, Oregon,
Sacramento, California, and Phoenix, Arizona. As a result of these factors,
selling and administrative expenses and depreciation increased slightly to 3.61%
of revenues compared to 3.57% in fiscal 1994.

The decrease in amortization in fiscal 1995 was a result of the write-off
of the value of the excess of cost over net assets acquired ("goodwill") which
the Company recorded in the third quarter of fiscal 1994.

Operating income, excluding unusual items and amortization, of $98.0
million for fiscal 1995 increased 13.9% over fiscal 1994. As a percentage of
revenues, the Company's operating margin, excluding unusual items and
amortization, expanded to 2.10% in fiscal 1995 from 2.06% in fiscal 1994.

Interest expense (excluding the amortization of deferred financing costs)
for the year ended September 30, 1995 was $49.8 million, a decrease of $8.8
million, or 15.1% as compared with the year ended September 30, 1994. The
decrease was due to the redemption, in January 1995, of the

17
<PAGE> 18

$166.1 million of 14 1/2% senior subordinated notes; the redemption, in May
1995, of $74.3 million of Senior Debentures; and the lower average interest
rates due to the implementation of the Receivables Program (as defined herein)
and the Credit Agreement providing for an amended revolving credit facility with
a lower interest rate than the previous facility. Average borrowings were $536
million during fiscal 1995 versus $562 million in fiscal 1994.

Income tax expense of $17.3 million in fiscal 1995 was based upon an annual
effective tax rate of 38%, which recognizes the utilization, for financial
reporting purposes, of operating loss carryforwards. The provision for income
taxes in fiscal 1994 represents the estimated taxes payable due to the
application of the alternative minimum tax. The extraordinary charge of $25.2
million in fiscal 1995, net of a tax benefit of $7.2 million, relates to the
amendment of the Credit Agreement, the redemption premium on the 14 1/2% senior
subordinated notes, the redemption premium on the Senior Debentures, and the
consequent write-off of unamortized deferred financing fees. The extraordinary
charge of $679,000 in fiscal 1994, net of a tax benefit of $23,000, relates to
the purchase and retirement of an aggregate principal amount of $4.4 million of
14 1/2% senior subordinated notes.

LIQUIDITY AND CAPITAL RESOURCES

During the six-month period ended March 31, 1996, the Company's operating
activities generated $4.2 million in cash despite the increase of $153.8 million
in merchandise inventories which was offset in part by the $119.0 million
increase in accounts payables and reflects the Company's growth as well as
increased purchases in anticipation of manufacturer price increases and other
deal buying opportunities. A portion of the increase in inventories during the
six month period was also due to the opening of the Phoenix, Arizona and
Orlando, Florida distribution facilities. Operating cash uses during the six
month period ended March 31, 1996 included $18.5 million in interest payments
and $4.3 million in income tax payments.

During the fiscal year ended September 30, 1995, the Company's operating
activities consumed $35.6 million in cash. The use of funds was primarily the
result of the increases in restricted cash, accounts and notes receivable, and
merchandise inventories, offset by an increase in accounts payable, accrued
expenses, and income taxes. Restricted cash represents amounts temporarily
deposited in the master trust pursuant to the Receivables Program. The net
increase in other working capital items was the result of opening distribution
facilities in Springfield, Massachusetts, Portland, Oregon, and Sacramento,
California. Operating cash uses during the year ended September 30, 1995
included $43.6 million in interest payments and $2.8 million in income tax
payments.

Capital expenditures for the six months ended March 31, 1996 were $9.7
million and are primarily equipment purchases related to the expansion of the
Company's pharmaceutical repackaging operation, the opening of the Orlando,
Florida and Phoenix, Arizona distribution centers, and additional investments in
information technology. Investments in information technology and warehouse
improvements are expected to continue throughout the year, and total capital
expenditures are expected to be $15.0 million for the fiscal year.

Capital expenditures for fiscal 1995 were $13.7 million and relate
principally to the opening of five new distribution centers, continuing
investments in management information systems, and warehouse improvements.
During fiscal 1995, the Company acquired substantially all of the assets of LDS
Liberty Drug Systems and Newbro Drug Company for approximately $4.9 million.
Liberty Drug Systems provides pharmacy dispensing hardware and software systems
in retail pharmacies. Newbro Drug Company is a full-service wholesale
pharmaceutical distributor in Idaho. The Company intends to continue its
investments in information systems and warehouse improvements and will continue
to evaluate acquisitions and other business opportunities.

In February, 1996, the Company purchased all of the stock of Gulf
Distribution Inc. in a cash transaction. The transaction was funded by
borrowings under the revolving credit facility. Gulf

18
<PAGE> 19

Distribution Inc. is a Miami, Florida-based wholesaler with annualized revenues
of approximately $180.0 million. The purchase price was $28.3 million.

Cash provided by financing activities during the first six months of fiscal
1996 represents borrowings under the Company's revolving credit facility and its
receivable securitization financing primarily to fund its working capital
requirements. As a result of the Company's initial public offering in April 1995
and its financial results, the borrowing rate alternatives under the Credit
Agreement were reduced by 1.0% to LIBOR plus 1.25% and the prime rate plus zero
beginning in October 1995. At March 31, 1996, borrowings under the Company's
$380 million revolving credit facility were $215 million (at an average interest
rate of 6.9%) and borrowings under the $285 million Receivables Program were
$210 million (at an average interest rate of 5.8%).

In December 1994, the Company sold substantially all of its trade accounts
receivable and notes receivable (the "Receivables") and continues to sell its
Receivables to AmeriSource Receivables Corporation ("ARC"), an indirect
wholly-owned special purpose subsidiary of the Company, pursuant to a trade
receivables securitization program (the "Receivables Program"). Pursuant to the
Receivables Program, ARC continuously transfers Receivables to a master trust in
exchange for, among other things, certain trade receivables-backed certificates
(the "Certificates") representing a right to receive a variable principal
amount. The cash generated by collections on the Receivables is used to
purchase, among other things, additional Receivables originated by the Company
and/or repay the Certificates. Contemporaneous with the consummation of the
Receivables Program, the Company executed the Credit Agreement to amend its
former revolving credit facility with its senior lenders, and in January 1995,
redeemed all of the outstanding 14 1/2% senior subordinated notes at a
redemption price of 106% of the principal amount plus accrued interest through
the redemption date totaling $176.2 million. In April 1995, the Company
completed an initial public offering of 7,590,000 common shares at $21.00 per
share, the net proceeds (approximately $148.2 million) of which were used to
redeem, in May 1995, one-half of the outstanding Senior Debentures for 110% of
the principal amount plus accrued interest through the date of redemption
(approximately $84.4 million) and to pay down borrowings under the Credit
Agreement. The Company also incurred approximately $10.1 million in fees
connected with the refinancings.

An increase in interest rates would adversely affect the Company's
operating results and the cash flow available after debt service to fund
operations and any expansion and, if permitted to do so under its revolving
credit facility, the Company's ability to pay dividends on its capital stock.

The Company's operating results have generated sufficient cash flows which,
together with borrowings under its debt agreements and credit terms from
suppliers, have provided sufficient capital resources to finance working capital
and cash operating requirements, and fund capital expenditures and interest
currently payable on outstanding debt. The Company's primary ongoing cash
requirements will be to fund payment of interest on indebtedness, finance
working capital, and fund capital expenditures, routine business growth and
expansion through new business opportunities. Future cash flows from operations
and borrowings under the debt agreements are expected to be sufficient to fund
the Company's ongoing cash requirements.

The Company is subject to contingencies pursuant to environmental laws and
regulations at one of its former distribution centers in Charleston, South
Carolina that may require remediation efforts. In fiscal 1994, the Company
accrued a liability of $4.1 million to cover future consulting, legal,
remediation, and ongoing monitoring costs. The accrued liability, which is
reflected in other long-term liabilities on the audited consolidated balance
sheet incorporated by reference herein, is based on an estimate of the extent of
contamination and choice of remedy, existing technology, and presently enacted
laws and regulations; however, changes in remediation standards, improvements in
cleanup technology, and discovery of additional information concerning the site
could affect the estimated liability in the future. The Company is investigating
the possibility of asserting claims against responsible parties for recovery of
these costs. Whether or not any recovery may be forthcoming is unknown at this
time. See "Business -- Regulatory Matters."

19
<PAGE> 20

In fiscal 1994, the Company concluded that the carrying value of goodwill
which was recorded at the time of the Acquisition could not be recovered from
expected future operations and accordingly wrote off its remaining goodwill
balance of $179.8 million. In fiscal 1994, the Company determined that its then
poor operating results since the Acquisition and its expectations for future
operating results were being adversely affected by its then current capital
structure, price competition for market share, health care industry
consolidation, and the impact of group purchasing organizations and health care
reform on drug prices. As these factors became clear, the Company assessed the
recoverability of its goodwill through projected operations. It was determined
that unless the Company was able to develop successful strategic operating or
financing initiatives which would change the assumptions used in those
projections, those projections were the best estimate of the Company's projected
performance given the Company's then existing high leverage and industry trends.
More importantly, the projections indicated that the Company's long-term
viability required modification of its then current capital structure to reduce
indebtedness and increase its equity. As a result of the Company's initial
public offering in April 1995 and the initiation of the Receivables Program, the
Company has reduced its level of indebtedness, increased its equity, and reduced
the interest rates charged on its remaining indebtedness. The proceeds from this
Offering will further reduce the Company's indebtedness.

20
<PAGE> 21

BUSINESS

THE COMPANY

Over the past five years, AmeriSource has achieved significant growth in
revenues and adjusted operating income. The Company's revenues have increased
from $2.5 billion in fiscal 1990 to $4.7 billion in fiscal 1995, a compound
annual growth rate of 13.5%, while adjusted operating income increased from
$43.8 million in fiscal 1990 to $98.0 million in fiscal 1995, a compound annual
growth rate of 17.5%. The Company's growth is primarily the result of market
share gains in existing markets, geographic expansion, and overall industry
growth.

BUSINESS STRATEGY

Over the past five years, AmeriSource has significantly expanded its
national presence as a leading, innovative wholesale distributor of
pharmaceutical products and related health care services. The Company believes
it is well-positioned to continue its revenue growth and increase operating
income through the execution of the following key elements of its business
strategy:

- Expansion into New Geographic Markets. Since October 1993, the Company
has opened six new distribution facilities and has acquired two others.
These openings and acquisitions have substantially increased its
geographic coverage and its access to potential markets. In October 1993,
the Company opened a facility in Dallas, Texas, and in November 1994, the
Company opened two additional facilities in Portland, Oregon and
Springfield, Massachusetts. The Company opened facilities in Sacramento,
California, Phoenix, Arizona, and Orlando, Florida in June, October, and
December 1995, respectively. While each of these new facilities began
operations with an existing customer base in its regional marketplace,
the Company believes there is substantial opportunity to grow these
operations. The Company has also sought to expand geographically by
making selective acquisitions. In July 1995, the Company acquired Newbro
Drug Company, a regional wholesale pharmaceutical distributor based in
Idaho Falls, Idaho, and in February 1996, the Company acquired Gulf
Distribution, Inc., a regional wholesale pharmaceutical distributor based
in Miami, Florida. Prior to the Acquisition in 1988, AmeriSource's
management team completed 18 acquisitions over a 10-year period. The
Company believes that as industry consolidation pressures continue,
additional opportunities may arise to selectively acquire local and
regional drug wholesale companies facilitating expansion into new
geographic areas and enhancement of its competitive position in existing
markets.

21
<PAGE> 22

local and regional management talent. These factors have allowed
AmeriSource to compete effectively in the marketplace, generate above
industry average sales growth over the last four years, and develop new
customers, such as the federal government. For example, over the past two
years the Company has been awarded contracts to provide pharmaceuticals
to more than 75% of the hospitals and clinics operated by the Veterans
Administration. In addition, the Company continues to grow with its
existing customers. The Company was selected by VHA Inc. as one of its
three primary providers and has been chosen as the preferred provider for
SunHealth. Both customers are among the nation's largest hospital group
purchasing organizations. AmeriSource also recently signed a contract
with the University HealthSystem Consortium ("UHC") as one of two
alternate pharmaceutical wholesalers to the existing primary wholesaler
to supply UHC's member hospitals. UHC is an alliance of more than 70
academic medical centers and their network partners. Its committed volume
purchasing program is one of the nation's largest, with annual
pharmaceutical purchases in excess of $750 million.

-- ECHO(TM), the Company's proprietary software system, provides
sophisticated ordering and inventory management assistance to its
hospital and retail customers. In addition to facilitating the
primary supply arrangement between the Company and its customers,
ECHO(TM) enables the Company's customers to reduce their costs
through ordering more efficiently, selecting from best price
alternatives, and maintaining formulary compliance. In fiscal 1995,
the Company acquired LDS Liberty Drug Systems, a software developer
based in Greensboro, North Carolina. The technology acquired with
this acquisition is being combined with the ECHO(TM) systems to
provide customers with a complete system for tracking usage,
reordering products, and managing records. Since the introduction of
ECHO(TM) in early fiscal 1991, the Company has installed
approximately 3,100 systems nationwide, and believes that its
installed base of systems is one of the largest in the wholesale drug
industry.

-- Family Pharmacy(R) enables small chain and independent community
pharmacies to compete more effectively through: (i) innovative
advertising, marketing, and promotional campaigns; (ii) value-added
merchandising programs including private label product lines; and
(iii) enhanced access to pharmaceutical benefit programs of large
health care groups, including third party payor programs. Family
Pharmacy(R) has grown dramatically in recent years. With 2,133 Family
Pharmacy(R) member-stores as of March 31, 1996, Family Pharmacy(R) in
effect constitutes one of the largest drugstore chains in the United
States.

-- The Company's Income Rx(R) program provides an integral value-added
service to hospital and retail pharmacist customers by continually
reviewing the marketplace for generic products that offer the best
price, quality, and availability. With the increasing importance of
generic pharmaceuticals, this program represents a significant
opportunity for growth and profitability. Revenues attributable to
AmeriSource's sale of generic pharmaceuticals (including through the
Income Rx(R) program) have increased to approximately $500 million in
fiscal 1995, more than twice what they were in fiscal 1992.

-- American Health Packaging(SM) repackages pharmaceuticals from bulk
quantities into smaller units of use and unit dose measurements
thereby providing both hospitals and retail customers with lower
product, inventory, and dispensing (labor) costs. The Company
recently expanded its packaging capacity with the opening of a new
53,000

22
<PAGE> 23

square foot state-of-the-art packaging facility in Columbus, Ohio. In
recent months, the Company has begun packaging pharmaceutical product
for other drug wholesale distributors, in addition to its marketing
of products directly through its Income RePax(R) program.

-- The Company's Health Services Plus business distributes oncology and
other specialty products to clinics and physician groups on a
national basis. Rita Ann Distributors markets cosmetics and
fragrances to chain drugstores and other retail customers.

- Maintaining Low Cost Operating Structure. AmeriSource has the lowest
operating cost structure among its four major national competitors. Over
the past five years, the Company has significantly reduced operating
expenses and investment in net working capital as a percentage of
revenues. Specifically, the Company has reduced its selling and
administrative expenses and depreciation as a percentage of revenues from
4.78% in fiscal 1990 to 3.61% in fiscal 1995. The Company continues to
achieve productivity and operating income gains from continued
investments in advanced management information systems, warehouse
automation technology, and from operating leverage due to above industry
average volume per facility. In fiscal 1995, the Company's average
revenue per pharmaceutical distribution facility was $258 million
compared to a calendar 1994 industry average of $213 million. The
addition of new facilities was accomplished with minimal incremental
investment in corporate overhead. If these facilities continue to expand
in their regional markets, the Company believes that its growth and
profitability will be further enhanced.

INDUSTRY OVERVIEW

The Company has benefited from the significant growth of the full-service
wholesale drug industry in the United States. Industry sales grew from $30
billion in 1990 to an estimated $57 billion in 1995, a compound annual growth
rate of 13.7%. The factors contributing to this growth, and the sources of
future growth for the industry, include (i) an aging population, (ii) the
introduction of new pharmaceuticals, (iii) the increased use of outpatient drug
therapies, (iv) a higher concentration of distribution through wholesalers by
both manufacturers and customers, and (v) rising pharmaceutical prices.

Aging Population. The number of individuals over age 65 in the United
States has grown 23% from approximately 26 million in 1980 to approximately 32
million in 1990 and is projected to increase an additional 9% to more than 35
million by the year 2000. This age group suffers from a greater incidence of
chronic illnesses and disabilities than the rest of the population and is
estimated to account for approximately two-thirds of total health care
expenditures in the United States.

Introduction of New Pharmaceuticals. Traditional research and development
as well as the advent of new research and production methods, such as
biotechnology, continue to generate new compounds that are more effective in
treating diseases. These compounds have been responsible for significant
increases in pharmaceutical sales. The Company believes that ongoing research
and development expenditures by the leading pharmaceutical manufacturers will
contribute to continued growth of the pharmaceutical wholesale distribution
industry.

Cost Containment Efforts. In response to rising health care costs,
governmental and private payors have adopted cost containment measures that
encourage the use of efficient drug therapies to prevent or treat diseases.
While national attention has been focused on the overall increase in aggregate
health care costs, the Company believes drug therapy has had a beneficial impact
on overall health care costs by reducing expensive surgeries and prolonged
hospital stays. Pharmaceuticals accounted for approximately 8% of overall U.S.
healthcare costs in calendar 1995, and manufacturers' emphasis on research and
development is expected to continue the introduction of cost-effective drug
therapies.

23
<PAGE> 24

Higher Concentration of Distribution Through Wholesalers. Over the past
decade, manufacturers of pharmaceuticals have significantly increased the
distribution of their products through wholesalers as the cost and complexity of
maintaining inventories and arranging for delivery of pharmaceutical products
has risen. Drug wholesalers offer their customers and suppliers more efficient
distribution and inventory management. As a result, from 1980 to 1995, the
percentage of pharmaceutical sales through wholesale drug distributors increased
from approximately 46% to approximately 61%. Order processing, inventory
management, and product delivery by wholesale drug distributors allow
manufacturers to allocate their resources to research and development,
manufacturing, and marketing their products. Customers benefit from this shift
by having a single source of supply for a full line of pharmaceutical products,
as well as lower inventory costs, more timely and efficient delivery, and
improved purchasing and inventory information. In addition, customers also
benefit from the range of value-added programs developed by wholesale drug
distributors that are targeted to the specific needs of these customers, which,
in turn, reduce their costs and increase their operating efficiencies.

Pharmaceutical Price Increases By Drug Manufacturers. The Company believes
that price increases by pharmaceutical manufacturers will continue to equal or
exceed the overall Consumer Price Index. The Company believes that this increase
will be due in large part to the relatively inelastic demand in the face of
higher prices charged for patented drugs as manufacturers have attempted to
recoup costs associated with the development, clinical testing, and Food and
Drug Administration ("FDA") approval of new products.

OPERATIONS

Decentralized Structure. The Company believes that operating economies of
scale exist principally at the distribution facility level. Beginning in fiscal
1989, the Company undertook an extensive consolidation program which closed 17
of the 31 facilities open on October 1, 1988. During the course of this
consolidation program, the Company continued to significantly increase its
revenues in each fiscal year. During fiscal 1995, the Company's average revenue
per pharmaceutical distribution facility was approximately $258 million,
compared to the calendar 1994 industry average of $213 million. Five AmeriSource
facilities each have annual volume of over $400 million and an additional five
facilities each have annual volume in excess of $213 million. The above-average
volume of these ten facilities provides significant leverage of fixed overhead
and other costs. Management believes that the opportunity exists for the Company
to further reduce its operating expenses as a percentage of sales to the extent
the Company's other distribution facilities, especially the six facilities
opened since October 1993, are able to increase their sales volume and utilize
available capacity.

To expand into new geographic markets, AmeriSource has opened six new
facilities since October 1993 and has acquired two regional wholesale
pharmaceutical distributors since April 1995. The Company currently operates 20
drug wholesale distribution facilities and two specialty products distribution
facilities, organized into four regions across the United States. Several
operating units of the Company have over 100 years of history in the business
and are among the nation's first drug distribution businesses. Unlike its more
centralized competitors, the Company is structured as an organization of locally
managed profit centers, primarily at the distribution facility level. Management
of each operating unit has fiscal responsibility for its unit, and each
operating unit has an established executive, sales, and operations staff. The
operating unit's results, including earnings and asset management goals, have a
direct impact on management compensation. The operating units utilize the
Company's corporate staff for marketing, financial, legal, and executive
management resources and corporate coordination of asset and working capital
management.

Sales and Marketing. The Company has an organization of approximately 220
sales professionals. A specially trained group of telemarketing/customer service
representatives makes regular contact with customers regarding special offers.
Within the sales organization, there is also a field force of approximately 75
hospital representatives, including regional hospital directors. The

24
<PAGE> 25

Company's corporate marketing department works with manufacturer suppliers to
develop national programs and promotions. Tailored to specific customer classes,
these programs can be further customized at the operating unit level to adapt to
local market conditions. The marketing department gathers and disseminates
information to each operating unit's purchasing and sales organization in order
to enhance their competitive effectiveness.

Facilities. Each of the Company's operating units carries an inventory
line necessary for its local market. The efficient distribution of small orders
is possible through the extensive use of computerization and modern warehouse
techniques. These include computerized warehouse product location, routing and
inventory replenishment systems, gravity-flow racking, mechanized order
selection, and efficient truck loading and routing. The Company delivers its
products on a scheduled basis, on a daily basis where required. It utilizes a
fleet of owned and leased vans and trucks and contract carriers. Night picking
operations in its distribution facilities have further reduced delivery time. To
meet customer needs, orders are typically delivered within one day.

The Company's 20 full service distribution facilities and two specialty
products facilities as of March 31, 1996 are organized into four regions
throughout the United States. The following table presents certain information
as of the end of the last five fiscal years regarding the Company's operating
units in the aggregate.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
----------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
(DOLLARS IN MILLIONS EXCEPT REVENUE PER SQUARE FEET)
<S> <C> <C> <C> <C> <C>
Revenue................................... $2,743.8 $3,237.7 $3,658.9 $4,182.2 $4,668.9
Number of Rx distribution facilities...... 18 17 15 14 18
Average revenue/Rx distribution
facility................................ $151.5 $189.7 $243.0 $297.1 $257.8
Total square feet (000's) (Rx
facilities)............................. 1,404.5 1,414.0 1,372.3 1,322.1 1,446.9
Average revenue/square foot (Rx
facilities)............................. $1,942.0 $2,281.0 $2,656.0 $3,146.0 $3,207.0
</TABLE>

Customers and Markets. The Company has a diverse customer base that
includes hospitals and managed care facilities, independent community pharmacies
including retail drug stores, nursing homes and clinics, and chain drug stores
including pharmacy departments of supermarkets and mass merchandisers. The
Company offers a broad range of services designed to enhance the operating
efficiencies and competitive position of its customers and suppliers. In
addition, AmeriSource is typically the primary source of supply for its
customers, delivering on a daily basis. The table below summarizes how the
Company's customer sales mix has changed over the last five fiscal years and the
twelve months ended March 31, 1996.

<TABLE>
<CAPTION>
TWELVE
MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, MARCH 31,
-------------------------------------------------------------------------------- ------------
1991 1992 1993 1994 1995 1996
------------ ------------ ------------ ------------ ------------ ------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Hospitals and Managed
Care Facilities...... $1,001 36% $1,253 39% $1,554 42% $1,968 47% $2,182 47% $2,240 45%
Independents........... 1,203 44 1,356 42 1,397 38 1,450 35 1,636 35 1,824 36
Chains................. 540 20 629 19 708 20 764 18 851 18 942 19
------ ---- ------ ---- ------ ---- ------ ---- ------ ---- ------ ----
Total.......... $2,744 100% $3,238 100% $3,659 100% $4,182 100% $4,669 100% $5,006 100%
====== ==== ====== ==== ====== ==== ====== ==== ====== ==== ====== ====
</TABLE>

No single customer represented more than 4% of the Company's total revenues
during fiscal 1995 other than the federal government which, in the aggregate,
accounted for approximately 10%. Excluding the federal government, the Company's
top ten customers represented approximately 15% of total revenues during fiscal
1995. The Company believes it is less dependent on any single customer than its
four largest competitors. A profile of each customer segment follows:

- Hospitals and Managed Care Facilities. AmeriSource is one of the
nations' top three distributors in serving the hospital and managed care
market segment, which is currently the

25
<PAGE> 26

fastest growing customer segment in the industry. Because hospitals and
managed care facilities purchase large volumes of high priced, easily
handled pharmaceuticals, the Company benefits from quick turnover of both
inventory and receivables and lower than average operating expenses. The
Company intends to continue to focus on the higher growth hospital and
managed care market segment through the use of dedicated facilities and
advanced information systems such as ECHO(TM). As a percentage of total
revenues, sales to hospitals and managed care facilities increased from
36% in fiscal 1991 to 47% in fiscal 1995 (and have grown at a compound
annual rate of 21.5% over this period) and were 45% for the twelve-month
period ended March 31, 1996.

- Independents. Independent community pharmacy owners represent the
largest segment of the industry and provide the greatest opportunity for
the Company's value-added services. The Company's sales to independent
customers have risen at a compound annual rate of 8.0% from fiscal 1991
through fiscal 1995 due to the general growth of this customer segment
and the success of the Company's customized marketing and merchandizing
programs, such as its Family Pharmacy(R) program.

- Chains. This category includes chain drug stores, including pharmacy
departments of supermarkets and mass merchandisers. The Company's sales
to chains have risen at a compound annual rate of 12.0% from fiscal 1991
through fiscal 1995. This growth rate reflects the results from the
Company entering into new contracts with several drug store chains.

Suppliers. AmeriSource obtains pharmaceutical and other products from a
number of manufacturers, none of which accounted for more than approximately 6%
of its net sales in fiscal 1995. The five largest suppliers in fiscal 1995
accounted for approximately 23% of net sales. Historically, the Company has not
experienced difficulty in purchasing desired products from suppliers. The
Company has agreements with many of its suppliers which generally require the
Company to maintain an adequate quantity of a supplier's products in inventory.
The majority of contracts with suppliers are terminable upon 30 days notice by
either party. The loss of certain suppliers could adversely affect the Company's
business if alternative sources of supply were unavailable. The Company believes
that its relationships with its suppliers are good.

Management Information Systems. The Company has continually invested in
advanced management information systems and automated warehouse technology. In
fiscal 1994, AmeriSource introduced it BOSS warehouse automation system, a
paper-less warehouse production program customized to AmeriSource's unique
requirements. First installed at its Paducah, Kentucky distribution center, the
second BOSS system has been installed at the Company's newly opened facility in
Orlando, Florida and the Company may selectively introduce the BOSS system in
additional facilities. Under the BOSS system, merchandise is received, placed in
inventory, retrieved, and shipped utilizing customized radio frequency
equipment. The Company's management information systems also provide for, among
other things, electronic order entry by customers, invoice preparation, and
purchasing and inventory tracking. As a result of electronic order entry, the
cost of receiving and processing orders has not increased as rapidly as sales
volume. The Company's customized systems strengthen customer relationships by
allowing the customer to lower its operating costs and by providing the basis
for a number of the valueadded services the Company provides to its customers,
including marketing data, inventory replenishment, single-source billing,
computer price updates, and price labels. AmeriSource believes that its
management information systems are capable of serving its needs for the
foreseeable future.

COMPETITION

The Company engages in the wholesale distribution of pharmaceuticals,
health and beauty aids, and other products in a highly competitive environment.
The Company competes with numerous national and regional distributors, some of
which are larger and have substantially greater financial resources than the
Company. The Company's national competitors include Bergen Brunswig

26
<PAGE> 27

Corporation, Cardinal Health, Inc., FoxMeyer Health Corporation, and McKesson
Corporation. In addition, the Company competes with local distributors,
direct-selling manufacturers, and other specialty distributors. Competitive
factors include price, service and delivery, credit terms, breadth of product
line, customer support, and marketing programs. There can be no assurance that
the Company will not encounter increased competition in the future that could
adversely affect the Company's business. The drug wholesale industry continues
to undergo significant consolidation, with the number of wholesalers in the
continental United States reduced from 139 at the end of 1980 to approximately
48 as of December 31, 1995.

EMPLOYEES

As of March 31, 1996, the Company employed approximately 2,900 persons, of
which approximately 2,700 were full-time employees. Certain of the employees at
three distribution facilities are covered by collective bargaining agreements.
The Company believes that its relationship with its employees is good.

REGULATORY MATTERS

The United States Drug Enforcement Administration, the FDA, and various
state boards of pharmacy regulate the distribution of pharmaceutical products
and controlled substances, requiring wholesale distributors of these substances
to register for permits and to meet various security and operating standards. As
a wholesale distributor of pharmaceuticals and certain medical/surgical
products, the Company is subject to these regulations. The Company has received
all necessary regulatory approvals and believes that it is in substantial
compliance with all applicable wholesale distribution requirements.

The Company is aware that at the site of its former distribution center
located in Charleston, South Carolina there is evidence of residual soil
contamination remaining from a fertilizer manufacturing process operated there
over thirty years ago. The Company's environmental consulting firm conducted a
soil survey and a groundwater study during fiscal 1994 and 1995. The results of
the studies indicate that there is lead on-site at levels requiring further
investigation and potential remediation. A preliminary engineering analysis was
prepared by outside consultants during the third quarter of fiscal 1994, and
indicated that if both soil and groundwater remediation are required, the most
likely cost is estimated to be $4.1 million. Accordingly, a liability of $4.1
million was recorded during fiscal 1994 to cover future consulting, legal,
remediation, and ongoing monitoring costs. The Company is working with the
appropriate state regulatory agency regarding further tests and potential site
remediation. That negotiation, investigation, and remediation could take several
years and the actual costs may differ from the liability that has been recorded.
The accrued liability ($3.9 million at March 31, 1996), which is reflected in
other long-term liabilities on the Company's consolidated balance sheet, is
based on the present estimate of the extent of contamination, choice of remedy,
and enacted laws and regulations, including remedial standards; however, changes
in any of these could affect the estimated liability. The Company is
investigating the possibility of asserting claims against responsible parties
for recovery of these costs. Whether or not any recovery may be forthcoming is
unknown at this time, although the Company intends to vigorously enforce its
rights and remedies.

LEGAL PROCEEDINGS

In November 1993, the Company was named a defendant in the United States
District Court in the Southern District of New York, along with six other
wholesale distributors and twenty-four pharmaceutical manufacturers, in a series
of purported class action antitrust lawsuits alleging violations of various
antitrust laws associated with the chargeback pricing system. In addition, the
Company is a party to a parallel suit filed in state court in Minnesota. In
October 1994, the Company entered into a Judgment Sharing Agreement with other
wholesaler and pharmaceutical manufacturer defendants. Under the Judgment
Sharing Agreement: (a) the manufacturer defendants

27
<PAGE> 28

agreed to reimburse the wholesaler defendants for litigation costs incurred, up
to an aggregate of $9 million, and (b) if a judgement is entered into against
both manufacturers and wholesalers, the total exposure for joint and several
liability of the Company is limited to the lesser of 1% of such judgement or $1
million. In addition, the Company has released any claims that it might have had
against the manufacturers for the claims presented by the plaintiffs in these
lawsuits. The Judgment Sharing Agreement covers the federal court litigation as
well as the cases which have been filed in various state courts. On April 4,
1996, the federal court granted the wholesalers' motion for summary judgment.

In October 1995, a proceeding was instituted before the Massachusetts Board
of Registration in Pharmacy (the "Massachusetts Board") against the Company. The
Massachusetts Board alleges that the Company's application for the licensure of
its facility in Springfield, Massachusetts submitted in September 1994 was
inaccurate and insufficient. The Company is contesting this allegation. The
Company cannot predict the outcome of the proceeding; however, it does not
believe that the outcome will have a material adverse effect on its business or
financial condition.

The Company is a party to various lawsuits arising in the ordinary course
of business. The Company, however, does not believe that the outcome of these
lawsuits, individually or in the aggregate, will have a material adverse effect
on its business or financial condition.

28
<PAGE> 29

MANAGEMENT

DIRECTORS AND OFFICERS OF THE COMPANY

<TABLE>
<CAPTION>
NAME AGE TITLE
- --------------------------------- --- ---------------------------------------------------
<S> <C> <C>
John F. McNamara(3).............. 61 Chairman, President and Chief Executive Officer
David M. Flowers................. 49 Executive Vice President, Marketing
R. David Yost.................... 48 Executive Vice President, Operations
Kurt J. Hilzinger................ 36 Vice President, Chief Financial Officer and
Treasurer
John A. Aberant.................. 39 Vice President, Assistant Treasurer
Teresa T. Ciccotelli............. 44 Vice President, General Counsel and Secretary
Michael D. DiCandilo............. 35 Vice President, Controller
Robert E. McHugh................. 54 Vice President, Industry Affairs and Investor
Relations
J. Michael McNamara.............. 39 Senior Vice President, Sales
Bruce C. Bruckmann(1)............ 42 Director
Michael A. Delaney(1)............ 41 Director
Richard C. Gozon(1)(2)........... 57 Director
Lawrence C. Karlson(3)........... 53 Director
George H. Strong(2).............. 69 Director
James A. Urry(1)................. 42 Director
Barton J. Winokur(2)(3).......... 56 Director
</TABLE>

- ---------------
(1) Member of Compensation Committee of the Company's Board of Directors.

(2) Member of Audit Committee of the Company's Board of Directors.

(3) Member of Capital Appropriations Committee of the Company's Board of
Directors.

John F. McNamara. Mr. McNamara has been Chairman, President and Chief
Executive Officer of the Company and of AmeriSource Corporation, the Company's
chief operating subsidiary, since 1989 and has been President of AmeriSource
Corporation since 1987. Prior to holding these positions, he was Chief Operating
Officer, from 1986 to 1989, and Executive Vice President, from 1985 to 1987, of
AmeriSource Corporation. He also served as Chairman, from 1986 to 1990, and
President, from 1981 to 1986, of the Kauffman-Lattimer Division of AmeriSource
Corporation. Mr. McNamara served on the executive committee of the National
Wholesale Druggists' Association from 1991 through 1994 and served as its
Chairman of the Board from November 1993 to November 1994. Mr. McNamara is a
member of the Capital Appropriations Committee of the Company's Board of
Directors.

David M. Flowers. Mr. Flowers has been Executive Vice President, Marketing
since December 1995. Prior to that he had held the positions of Group
President -- Eastern Region since 1989, President of the AmeriSource Southeast
Region from 1988 to 1989, and President of the Duff Brothers Division of
AmeriSource Corporation from 1984 to 1987.

R. David Yost. Mr. Yost has been Executive Vice President, Operations
since December 1995. Prior to that he had held the positions of Group
President -- Central Region since 1989, and President, from 1986 to 1989, and
Executive Vice President and General Manager, from 1984 to 1986, of the
Kauffman-Lattimer Division of AmeriSource Corporation.

Kurt J. Hilzinger. Mr. Hilzinger has served as Vice President, Chief
Financial Officer and Treasurer since February 1995. Prior to that, he served as
Vice President, Finance, and Treasurer since October 1993, and as Vice
President, Financial Planning since March 1991. Before joining the Company, he
was a Vice President in the Corporate Advisory Division of Citicorp from 1986 to
1991.

John A. Aberant. Mr. Aberant has served as Vice President, Assistant
Treasurer of the Company since October 1995. Previously, he served as Vice
President, Insurance and Benefits

29
<PAGE> 30

since September 1994, and Director of Insurance and Benefits since July 1992.
Prior to that he served as Assistant Controller of the Company from June 1989.
Before joining the Company, he was Controller of the Renal Care Centers division
of United Medical Corporation from August 1988 to May 1989.

Teresa T. Ciccotelli. Ms. Ciccotelli has served as Vice President, General
Counsel and Secretary since 1989. Prior to that, from 1985 to 1989, she was an
attorney with Alco Standard Corporation.

Michael D. DiCandilo. Mr. DiCandilo has served as Vice President,
Controller of the Company since November 1995. Previously, he served as Vice
President, Finance and Administration, of the North Eastern Region of
AmeriSource Corporation since October 1990. Prior to that he had been a Senior
Manager with Ernst & Young.

Robert E. McHugh. Mr. McHugh has served as Vice President, Industry
Affairs and Investor Relations since August 1995. Previously, he served as Vice
President, Marketing of the Company since August 1991. Prior to that he was
President of J.E. Goold from 1990 to 1991 and Vice President, Industry Affairs
of the National Wholesale Druggists' Association from 1983 to 1990.

J. Michael McNamara. Mr. McNamara has served as Senior Vice President,
Sales of the Company since November 1994. Previously, he served as Regional Vice
President of the West Central Region of AmeriSource Corporation since April
1991. Prior to that he was Vice President, Sales and Marketing of the Company
from 1990 to 1991, Vice President and General Manager of the Toledo Division of
AmeriSource Corporation from 1988 to 1990, and Director of Marketing of the
Columbus Division of AmeriSource Corporation from 1984 to 1988.

Bruce C. Bruckmann. Mr. Bruckmann previously served as a director of the
Company from 1989 to December 1991, and as a director of AmeriSource Corporation
from 1988 to December 1991, prior to his reelection as a director of the Company
in August 1992. Since February 1995, Mr. Bruckmann has been a Managing Director
of Bruckmann, Rosser, Sherrill & Co., Inc., an investment firm. Until January
1995, Mr. Bruckmann was a Managing Director of Citicorp Venture Capital Ltd. and
Court Square Capital Limited. Mr. Bruckmann serves as a director of Chromcraft
Revington, Inc., Cort Business Services Corporation, Jitney-Jungle Stores of
America, Inc. and Mohawk Industries, Inc. Mr. Bruckmann is a member of the
Compensation Committee of the Company's Board of Directors.

Michael A. Delaney. Mr. Delaney has been a director since January 1995.
Mr. Delaney has been a Vice President of Citicorp Venture Capital Ltd. since
1989. From 1986 through 1989 he was Vice President of Mergers and Acquisitions
at Citicorp. Mr. Delaney is also a director of Sybron Chemicals, Inc., GVC
Holdings, JAC Holdings, Delco Remy International, Inc., Delco Remy America,
Inc., Reman Holdings, Inc., Enterprise Media Inc., SC Processing, Inc., The
Triumph Group, FF Holdings Corporation, Cort Business Services Corporation, Cort
Furniture Rental Corporation, Palomar Technologies Corporation, and Palomar
Products, Inc. Mr. Delaney is a member of the Compensation Committee of the
Company's Board of Directors.

Richard C. Gozon. Mr. Gozon was elected to the Board of Directors in 1994.
Mr. Gozon has been Executive Vice President of Weyerhaeuser Company since June
1994. Mr. Gozon was formerly President and Chief Operating Officer of Alco
Standard Corporation from 1988 to 1993. He is also a director of UGI Corp. and
The Triumph Group. Mr. Gozon is Chairman of the Compensation Committee and a
member of the Audit Committee of the Company's Board of Directors.

Lawrence C. Karlson. Mr. Karlson was elected to the Board of Directors in
1994. Mr. Karlson is Chairman of Karlson Corporation, a private investment
company, and serves as a director of CDI Corporation. Mr. Karlson is a member of
the Capital Appropriations Committee of the Company's Board of Directors.

30
<PAGE> 31

George H. Strong. Mr. Strong was elected to the Board of Directors in
1994. Mr. Strong is a private investor and serves as a director of Corefunds,
Health South Rehabilitation Corp. and Integrated Health Services, Inc. Mr.
Strong is Chairman of the Audit Committee of the Company's Board of Directors.

James A. Urry. Mr. Urry has been a director since January 1995. Mr. Urry
has been with Citibank, N.A. since 1981, serving as a Vice President since 1986.
He has been a Vice President of Citicorp Venture Capital Ltd. since 1989. He is
also a director of FF Holdings Corporation, York International Corporation,
Hancor Holding Corp., Cort Furniture Rental Corporation, and Cort Business
Services Corporation. Mr. Urry is a member of the Compensation Committee of the
Company's Board of Directors.

Barton J. Winokur. Mr. Winokur has been a director since 1990. Mr. Winokur
is a partner in the law firm of Dechert Price & Rhoads and serves as a director
of CDI Corporation, FF Holdings Corporation, Farm Fresh, Inc., Davco
Restaurants, Inc., and The Bibb Company. Mr. Winokur is Chairman of the Capital
Appropriations Committee and a member of the Audit Committee of the Company's
Board of Directors.

Directors of the Company are elected to serve annual terms and until their
successors are elected and qualified. Each director is a citizen of the United
States. Officers are elected annually by the Board of Directors to serve for the
ensuing year and until their respective successors are elected. There are no
arrangements or understandings between any of the officers and any other person
pursuant to which he or she was elected an officer. There are no family
relationships between any directors and executive officers. An officer of the
Company, J. Michael McNamara, Senior Vice President, Sales, is the son of John
F. McNamara, Chairman, President and Chief Executive Officer of the Company.

31
<PAGE> 32

SELLING STOCKHOLDERS

The following table sets forth certain information known to the Company
with respect to the beneficial ownership of each of the Selling Stockholders of
the Company's Common Stock as of March 31, 1996, and as adjusted to reflect the
sale of Common Stock in the Offering. As of March 31, 1996, there were
22,170,686 shares of the Company's Common Stock outstanding.
<TABLE>
<CAPTION>
OWNERSHIP PRIOR TO THE OFFERING(1)
---------------------------------------------------------------------------------------
NUMBER OF PERCENT OF NUMBER OF PERCENT OF NUMBER OF PERCENT OF
VOTING VOTING NON-VOTING NON-VOTING ALL ALL
COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY
OWNED OWNED OWNED OWNED OWNED OWNED
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
399 Venture Partners, Inc.
("VPI")(2)(3)............ 234,926 1.1% 9,786,147 44.1% 10,021,073 45.2%

OWNERSHIP AFTER THE
OFFERING
---------------------------
NUMBER OF PERCENT OF
ALL ALL
NUMBER OF SHARES COMMON STOCK COMMON STOCK
TO BE SOLD IN BENEFICIALLY BENEFICIALLY
THE OFFERING OWNED OWNED
---------------- ------------ ------------
<S> <C> <C> <C>
399 Venture Partners, Inc.
("VPI")(2)(3)............ 3,300,000 6,721,073 28.4%
</TABLE>

- ---------------

* Less than 1%.

(1) Based on information furnished to the Company by the respective
stockholders. Except as indicated below, the Company is informed that the
beneficial owners have sole voting and investment power over the shares
shown opposite their names.

(2) Includes 9,786,147 shares of Class B Common Stock owned by VPI.

(3) VPI disclaims beneficial ownership as to shares of Common Stock held by
investors currently or previously affiliated with VPI. VPI's address is 1209
Orange Street, Wilmington, Delaware 19801. VPI is a wholly-owned, indirect
subsidiary of Citicorp.

The financing for the Acquisition consisted in part of the issuance by the
Company of $11.4 million principal amount of 18% Senior Subordinated Debentures
due October 31, 2001 (the "Senior Subordinated Debentures") and $20.0 million
principal amount of 19.5% Junior Subordinated Debentures due October 31, 2001
(the "Junior Subordinated Debentures") to Citicorp Investments Inc. ("CII"), the
predecessor company to VPI. The indentures governing the Senior Subordinated
Debentures and the Junior Subordinated Debentures permitted payment of interest
by issuance of additional debentures for the first five years following
issuance, at the Company's option. As of July 26, 1993, CII owned $21.3 million
principal amount of Senior Subordinated Debentures and $37.9 million principal
amount of Junior Subordinated Debentures, in each case including accrued and
unpaid interest. On July 26, 1993, the Company used the net proceeds from the
public offering of the Senior Debentures to, among other things, redeem the
Senior Subordinated Debentures and Junior Subordinated Debentures held by CII at
a redemption price of 100% of the principal amount thereof, plus accrued and
unpaid interest thereon to the date of redemption.

32
<PAGE> 33

SHARES ELIGIBLE FOR FUTURE SALE

Certain holders were granted piggyback registration rights with respect to
the Common Stock when they purchased their shares. After the Offering, of the
23,670,686 shares of Common Stock outstanding, an aggregate of approximately 7.0
million shares of Common Stock owned by such registration rights holders will be
entitled to piggyback registration rights. In addition, VPI, which will hold in
the aggregate approximately 6.7 million shares of Common Stock after the
Offering, has been granted demand rights to require the registration of its
shares. The Company, VPI, and certain executive officers and directors of the
Company which will hold, in the aggregate approximately 7.8 million shares of
Common Stock after the Offering, have agreed, except as described below, that,
during the period beginning from the date of this Prospectus and continuing to
and including the date 90 days after the date of the Prospectus, they will not
offer, sell, contract to sell or otherwise dispose of any securities of the
Company (other than pursuant to employee stock option plans existing, or on the
conversion or exchange of convertible or exchangeable securities outstanding, on
the date of this Prospectus) which are substantially similar to the shares of
the Common Stock or which are convertible or exchangeable into securities which
are substantially similar to the shares of Common Stock without the prior
written consent of the Underwriters, except for the shares of Common Stock
offered in connection with the concurrent U.S. and international offerings. Such
consent may be provided without prior notice to holders of the Common Stock or
to the markets where such securities are traded. The Underwriters have agreed
that Messrs. McNamara, Flowers, Hilzinger and Yost may sell up to 150,000,
32,000, 25,000 and 35,000 shares, respectively, after 30 days following the date
of the Prospectus.

33
<PAGE> 34

UNDERWRITING

Subject to the terms and conditions of the U.S. Underwriting Agreement, the
Company and the Selling Stockholders have agreed to sell to each of the U.S.
Underwriters named below and each of such U.S. Underwriters has severally agreed
to purchase from the Company and the Selling Stockholders, the respective number
of shares of Common Stock set forth opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
UNDERWRITER COMMON STOCK
-------------------------------------------------------------- ------------
<S> <C>
Goldman, Sachs & Co........................................... 855,000
Donaldson, Lufkin & Jenrette Securities Corporation........... 855,000
Smith Barney Inc. ............................................ 855,000
Bear, Stearns & Co. Inc. ..................................... 855,000
Wheat, First Securities, Inc. ................................ 380,000
------------
Total............................................... 3,800,000
============
</TABLE>

Under the terms and conditions of the U.S. Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.

The U.S. Underwriters propose to offer the shares of Common Stock in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus and in part to certain securities dealers at such
price less a concession of $0.85 per share. The U.S. Underwriters may allow, and
such dealers may reallow, a concession not in excess of $0.10 per share to
certain brokers and dealers. After the shares of Common Stock are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the U.S. Underwriters.

The Company and the Selling Stockholders have entered into an underwriting
agreement (the "International Underwriting Agreement") with the underwriters of
the international offering (the "International Underwriters") providing for the
concurrent offer and sale of 1,000,000 shares of Common Stock in an
international offering outside the United States. The offering price and
aggregate underwriting discounts and commissions per share for the two offerings
are identical. The closing of the offering made hereby is a condition to the
closing of the international offering, and vice versa. The International
Underwriters are Goldman Sachs International, Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), Smith Barney Inc., Bear, Stearns International
Limited and Wheat, First Securities, Inc.

Pursuant to an agreement between the U.S. and international underwriting
syndicates (the "Agreement Between") relating to the two offerings, each of the
U.S. Underwriters has agreed or will agree that, as a part of the distribution
of the shares offered hereby and subject to certain exceptions, it will offer,
sell or deliver the shares of Common Stock, directly or indirectly, only in the
United States of America (including the States and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction
(the "United States") and to U.S. persons, which term shall mean, for purposes
of this paragraph: (a) any individual who is a resident of the United States or
(b) any corporation, partnership or other entity organized in or under the laws
of the United States or any political subdivision thereof and whose office most
directly involved with the purchase is located in the United States. Each of the
International Underwriters has agreed or will agree pursuant to the Agreement
Between that, as a part of the distribution of the shares offered as a part of
the international offering, and subject to certain exceptions, it will (i) not,
directly or indirectly, offer, sell or deliver shares of Common Stock (a) in the
United States or to any U.S. persons or (b) to any person who it believes
intends to reoffer, resell or deliver the shares in the United States or to any
U.S. persons, and (ii) cause any dealer to whom it may sell such shares at any
concession to agree to observe a similar restriction.

34
<PAGE> 35

Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Common Stock as may be mutually agreed. The price of any shares so sold shall be
the initial public offering price, less an amount not greater than the selling
concession.

The Company, VPI, and certain executive officers and directors of the
Company have agreed, except as described below, that, during the period
beginning from the date of this Prospectus and continuing to and including the
date 90 days after the date of the Prospectus, they will not offer, sell,
contract to sell or otherwise dispose of any securities of the Company (other
than pursuant to employee stock option plans existing, or on the conversion or
exchange of convertible or exchangeable securities outstanding, on the date of
this Prospectus) which are substantially similar to the shares of the Common
Stock or which are convertible or exchangeable into securities which are
substantially similar to the shares of Common Stock without the prior written
consent of the Underwriters, except for the shares of Common Stock offered in
connection with the concurrent U.S. and international offerings. Such consent
may be provided without prior notice to holders of the Common Stock or to the
markets where such securities are traded. The Underwriters have agreed that
Messrs. McNamara, Flowers, Hilzinger and Yost may sell up to 150,000, 32,000,
25,000 and 35,000 shares, respectively, after 30 days following the date of the
Prospectus.

A Selling Stockholder has granted the U.S. Underwriters an option
exercisable for 30 days after the date of the Prospectus to purchase up to an
aggregate of 570,000 additional shares of Common Stock to cover over-allotments,
if any. If the U.S. Underwriters exercise their over-allotment option, the U.S.
Underwriters have severally agreed, subject to certain conditions, to purchase
approximately the same percentage thereof that the number of shares to be
purchased by each of them, as shown in the foregoing table, bears to 3,800,000
shares of Common Stock offered. A Selling Stockholder has granted the
International Underwriters a similar option to purchase up to an aggregate of
150,000 additional shares of Common Stock.

This Prospectus may be used by underwriters and dealers in connection with
offers and sales of the Common Stock, including shares initially sold in the
international offering, to persons located in the United States.

The Company and the Selling Stockholders have agreed to indemnify the
several underwriters against certain liabilities, including liabilities under
the Securities Act.

Certain members of AmeriSource's management have outstanding margin loans
from DLJ. The margin loans were incurred primarily to satisfy certain tax
liabilities in connection with the exercise of employee stock options. These
members of management have pledged the shares of Common Stock acquired pursuant
to exercise of such options as collateral for the margin loans. Under certain
circumstances, DLJ may foreclose on and sell such pledged Common Stock.

The Company has commenced an offer to purchase all of its outstanding
Senior Debentures from the holders thereof (the "Tender Offer") and a
solicitation of consents from the holders of Senior Debentures for the amendment
of certain covenants in the Indenture (the "Consent Solicitation"). DLJ will act
as Dealer Manager in connection with the Tender Offer and the Consent
Solicitation. The Company has agreed to pay DLJ, upon acceptance of the Senior
Debentures by the Company for payment and purchase pursuant to the Tender Offer,
a fee of 0.50% of the aggregate principal amount of Senior Debentures tendered,
for its services as Dealer Manager in connection with the Tender Offer and the
Consent Solicitation. The Company has also agreed to indemnify the Dealer
Manager and its affiliates against certain liabilities under Federal or state
law or otherwise caused by, relating to or arising out of the Tender Offer or
the Consent Solicitation.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Dechert Price & Rhoads, Philadelphia, Pennsylvania.
Certain legal matters with respect

35
<PAGE> 36

to the shares of Common Stock offered hereby will be passed upon for the
Underwriters by Cahill Gordon & Reindel (a partnership including a professional
corporation), New York, New York. Barton J. Winokur, a partner of Dechert Price
& Rhoads, which performs various legal services for the Company, is a director
of the Company and owns 19,750 shares of the Common Stock of the Company.

EXPERTS

The consolidated financial statements and schedules of AmeriSource Health
Corporation and subsidiaries as of September 30, 1995 and 1994, and for each of
the three years in the period ended September 30, 1995 incorporated by reference
in this Prospectus and Registration Statement (as defined herein) from the
Company's Annual Report on Form 10-K for the year ended September 30, 1995 have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated by reference herein and in the
Registration Statement. Such consolidated financial statements and schedules are
incorporated by reference herein in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements, and other
information with the Commission. Such reports, proxy statements, and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at the Commission's Regional
Offices located at Seven World Trade Center, Suite 1300, New York, New York
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such materials can also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates.

The Company has filed with the Commission the Registration Statement on
Form S-3 under the Securities Act (the "Registration Statement") with respect to
the Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules thereto, certain portions of which have been omitted as permitted by
the rules and regulations of the Commission. Statements made in this Prospectus
as to the contents of any contract, agreement or other document referred to are
not necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to, or incorporated by reference into, the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement is qualified in its
entirety by such reference. For further information regarding the Company and
the shares of Common Stock offered hereby, reference is hereby made to the
Registration Statement and the exhibits and schedules which may be obtained from
the Public Reference Section of the Commission as set forth above.

The Registration Statement and the exhibits and schedules thereto filed
with the Commission may be inspected without charge at the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such materials may also be obtained from the
Commission's Regional Offices located at Seven World Trade Center, Suite 1300,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.

36
<PAGE> 37

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents heretofore filed by the Company with the Commission
(File No. 33-27835-01) pursuant to the Exchange Act are incorporated herein by
reference:

(i) the Company's Annual Report on Form 10-K for the year ended
September 30, 1995;

(ii) the Company's Quarterly Reports on Form 10-Q for the quarters
ended December 31, 1995 and March 31, 1996; and

(iii) the description of the capital stock of the Company included in
the Company's Registration Statement on Form 8-A, filed on March 24, 1995.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Offering made hereby shall be deemed to be incorporated by
reference in this Prospectus and to be part hereof from the date of filing of
such documents.

Certain information incorporated by reference herein contains
forward-looking statements as such term is defined in Section 27A of the
Securities Act and Section 21E of the Exchange Act. Certain factors as discussed
in "Risk Factors" could cause actual results to differ materially from those in
the forward-looking statements.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.

To the extent that any proxy statement is incorporated by reference herein,
such incorporation shall not include any information contained in such proxy
statement that is not, pursuant to the Commission's rules, deemed to be "filed"
with the Commission or subject to the liabilities of Section 18 of the Exchange
Act.

The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into such documents). Any such request should be directed to Teresa T.
Ciccotelli, Esq., Vice President, General Counsel and Secretary, AmeriSource
Health Corporation, P.O. Box 959, Valley Forge, Pennsylvania 19482 (telephone
number (610) 296-4480).

37
<PAGE> 38

INDEX TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Statement of Operations for the year ended September 30, 1995
(unaudited)......................................................................... P-3
Consolidated Statement of Operations for the six months ended March 31, 1996
(unaudited)......................................................................... P-4
Consolidated Statement of Operations for the six months ended March 31, 1995
(unaudited)......................................................................... P-5
Consolidated Balance Sheet as of March 31, 1996
(unaudited)......................................................................... P-6
</TABLE>

P-1
<PAGE> 39

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The unaudited pro forma statements of operations for the fiscal year ended
September 30, 1995 and for the six months ended March 31, 1996 and 1995 set
forth below give effect to the use of the proceeds from the Offering made hereby
(the "1996 Offering") of $49.3 million, assuming the sale of 1,500,000 shares of
Common Stock by the Company at an offering price of $35.00 per share less
estimated issuance cost of $3.2 million, as if such transaction had occurred as
of October 1, 1994. Additionally, the unaudited pro forma financial statements
for the fiscal year ended September 30, 1995 and for the six months ended March
31, 1995 give effect to the consummation of the receivables securitization
financing and the amendment of the Credit Agreement in December 1994 and the
redemption of the 14 1/2% senior subordinated notes in January 1995
(collectively the "1995 Refinancing"), and the net proceeds of $148 million from
the issuance of 7,590,000 shares of Common Stock in a public offering at $21.00
per share in April 1995 and the related exercise of stock options (the "1995
Offering"). See Notes 4 and 5 to the Company's Annual Report on Form 10-K for
the year ended September 30, 1995, incorporated by reference in this Prospectus,
for additional information.

The unaudited pro forma balance sheet as of March 31, 1996 set forth below
gives effect to the 1996 Offering as if such transaction had occurred on March
31, 1996.

The unaudited pro forma financial statements are not necessarily indicative
of what the Company's results of operations and balance sheet would have been
had the 1995 Refinancing, the 1995 Offering, and the 1996 Offering been
consummated at the assumed dates, nor are they necessarily indicative of the
Company's results of operations and balance sheet for any future period. The
unaudited pro forma financial statements should be read in conjunction with the
audited and unaudited consolidated financial statements and related notes
thereto and "Use of Proceeds" included elsewhere or incorporated by reference in
this Prospectus.

P-2
<PAGE> 40

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30, 1995
-------------------------------------------------------------------------------------------
PRO FORMA
PRO FORMA ADJUSTMENTS ADJUSTMENTS
------------------------ -----------
1995 1995 1996
HISTORICAL REFINANCING OFFERING AS ADJUSTED OFFERING AS ADJUSTED
---------- ----------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenues............................ $4,668,948 $ -- $ -- $4,668,948 $ -- $4,668,948
Cost of goods sold.................. 4,402,593 4,402,593 4,402,593
---------- ---------- ----------
Gross profit........................ 266,355 266,355 266,355
Selling and administrative
expenses.......................... 161,064 161,064 161,064
Depreciation........................ 7,456 7,456 7,456
---------- ---------- ----------
Operating income.................... 97,835 97,835 97,835
Interest expense.................... 52,288 (3,745)(1) (7,110 )(2) 41,433 (3,723)(3) 37,710
---------- ------- ------- ---------- ------- ----------
Income before taxes and
extraordinary items............... 45,547 3,745 7,110 56,402 3,723 60,125
Taxes on income..................... 17,329 1,413(4) 2,682 (4) 21,424 1,415(4) 22,839
---------- ------- ------- ---------- ------- ----------
Income before extraordinary
items(5).......................... $ 28,218 $ 2,332 $ 4,428 $ 34,978 $ 2,308 $ 37,286
========== ======= ======= ========== ======= ==========
Income before extraordinary items
per share (fully diluted)(5)...... $ 1.53 $ 1.57 $ 1.57 (6)
========== ========== ==========
Weighted average common shares
outstanding (fully diluted)(7).... 18,396 22,272 23,772
========== ========== ==========
</TABLE>

- ---------------
(1) Adjusted for interest savings consisting of: (i) a $6,876 reduction due to
the redemption of the 14 1/2% senior subordinated notes; (ii) a $599
reduction in amortization of deferred financing fees related to the 14 1/2%
senior subordinated notes and the Credit Agreement, (iii) additional
interest of $3,302 associated with the Credit Agreement and Receivables
Program and (iv) the addition of $428 of amortization of deferred financing
fees. The Receivables Program is assumed to bear a cost of 8.1% per annum
(representative of historical rates on fixed principal certificates) on the
assumed $207,000 in Certificates sold to investors. The Credit Agreement is
assumed to bear a weighted average interest rate of 9.0% per annum, which is
representative of historical interest rates.

(2) Adjusted for interest savings consisting of: (i) a $4,956 reduction due to
the redemption of one-half of the Senior Debentures; (ii) a $145 reduction
in amortization of deferred financing fees related to the Senior Debentures;
and (iii) a $2,009 reduction due to an assumed weighted average net pay down
of $45,709 in borrowings under the Credit Agreement. The Credit Agreement is
assumed to bear a weighted average interest rate of 9.0% per annum, which is
representative of historical interest rates.

(3) Adjusted for interest savings of $3,723 due to an assumed repayment of
$49,300 in borrowings under the Credit Agreement. The Credit Agreement is
assumed to bear a weighted average interest rate of 9.0% per annum, which is
representative of historical interest rates.

(4) Tax provision arising from the pro forma adjustments.

(5) Does not reflect an extraordinary charge of $18,037, net of tax benefits,
relating to the amendment of the Credit Agreement, the redemption of the
14 1/2% senior subordinated notes and the partial redemption of the Senior
Debentures.

(6) As discussed in note (3), the $49,300 proceeds from the 1996 Offering are
assumed to be used to repay borrowings under the Credit Agreement. If the
proceeds were assumed to be used to purchase and retire Senior Debentures at
a price of 112.75% of the principal amount thereof (including fees) plus
accrued interest, income before extraordinary items per share on a fully
diluted basis would be $1.61. On May 20, 1996, the Company commenced a
tender offer and related consent solicitation with respect to all of the
outstanding Senior Debentures, whereby the Company has offered to pay to
tendering holders, subject to the fulfillment of certain conditions, 110.25%
of the principal amount thereof plus accrued interest and a consent fee
equal to two percent of the principal amount thereof. There can be no
assurances that the Company will be able to purchase the Senior Debentures
pursuant to the tender offer or otherwise. See "Use of Proceeds."

(7) The pro forma weighted average common shares outstanding reflects the
additional shares issued in connection with the 1996 Offering and the 1995
Offering.

P-3
<PAGE> 41

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31, 1996
------------------------------------------
PRO FORMA
ADJUSTMENTS
-----------
1996
HISTORICAL OFFERING AS ADJUSTED
---------- ----------- -----------
<S> <C> <C> <C>
Revenues............................................ $2,644,569 $ -- $ 2,644,569
Cost of goods sold.................................. 2,496,686 2,496,686
---------- ----------
Gross profit........................................ 147,883 147,883
Selling and administrative expenses................. 92,245 92,245
Depreciation........................................ 3,964 3,964
---------- ----------
Operating income.................................... 51,674 51,674
Interest expense.................................... 19,002 (1,680)(1) 17,322
---------- ------- ----------
Income before taxes................................. 32,672 1,680 34,352
Taxes on income..................................... 13,722 681(2) 14,403
---------- ------- ----------
Net income.......................................... $ 18,950 $ 999 $ 19,949
========== ======= ==========
Net income per share (fully diluted)................ $ 0.84 $ 0.83(3)
========== ==========
Weighted average common shares outstanding
(fully diluted)(4)................................ 22,504 24,004
========== ==========
</TABLE>

- ---------------
(1) Adjusted for interest savings of $1,680 due to an assumed repayment of
$49,300 in borrowings under the Credit Agreement. The Credit Agreement is
assumed to bear a weighted average interest rate of 7.7% per annum, which is
representative of historical interest rates.

(2) Tax provision arising from the pro forma adjustments.

(3) As discussed in note (1), the $49,300 proceeds are assumed to be used to
repay borrowings under the Credit Agreement. If the proceeds were assumed to
be used to purchase and retire Senior Debentures at a price of 112.75% of
the principal amount thereof (including fees) plus accrued interest, net
income per share on a fully diluted basis would be $0.85. On May 20, 1996,
the Company commenced a tender offer and related consent solicitation with
respect to all of the outstanding Senior Debentures, whereby the Company has
offered to pay to tendering holders, subject to the fulfillment of certain
conditions, 110.25% of the principal amount thereof plus accrued interest
and a consent fee equal to two percent of the principal amount thereof.
There can be no assurances that the Company will be able to purchase the
Senior Debentures pursuant to the tender offer or otherwise. See "Use of
Proceeds."

(4) The pro forma weighted average common shares outstanding reflects the
additional shares issued in connection with the 1996 Offering.

P-4
<PAGE> 42

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31, 1995
---------------------------------------------------------------------------------------
PRO FORMA
PRO FORMA ADJUSTMENTS ADJUSTMENTS
------------------------ -----------
1995 1995 1996
HISTORICAL REFINANCING OFFERING AS ADJUSTED OFFERING AS ADJUSTED
---------- ----------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenues........................... $2,307,131 $ -- $ -- $2,307,131 $ -- $2,307,131
Cost of goods sold................. 2,178,256 2,178,256 2,178,256
---------- ---------- ----------
Gross profit....................... 128,875 128,875 128,875
Selling and administrative
expenses......................... 78,134 78,134 78,134
Depreciation....................... 3,436 3,436 3,436
---------- ---------- ----------
Operating income................... 47,305 47,305 47,305
Interest expense................... 31,989 (3,659)(1) (6,582)(2) 21,748 (1,809)(3) 19,939
---------- ------- ------- ---------- ------- ----------
Income before taxes and
extraordinary items.............. 15,316 3,659 6,582 25,557 1,809 27,366
Taxes on income.................... 7,757 1,337(4) 2,406(4) 11,500 687(4) 12,187
---------- ------- ------- ---------- ------- ----------
Income before extraordinary
items(5)......................... $ 7,559 $ 2,322 $ 4,176 $ 14,057 $ 1,122 $ 15,179
========== ======= ======= ========== ======= ==========
Income before extraordinary items
per share (fully diluted)(5)..... $ 0.51 $ 0.63 $ 0.64 (6)
========== ========== ==========
Weighted average common shares
outstanding
(fully diluted)(7)............... 14,765 22,202 23,702
========== ========== ==========
</TABLE>

- ---------------
(1) Adjusted for interest savings consisting of: (i) a $6,876 reduction due to
the redemption of the 14 1/2% senior subordinated notes; (ii) a $599
reduction in amortization of deferred financing fees related to the 14 1/2%
senior subordinated notes and the Credit Agreement, (iii) additional
interest of $3,388 associated with the Credit Agreement and Receivables
Program and (iv) the addition of $428 of amortization of deferred financing
fees. The Receivables Program is assumed to bear a cost of 8.1% per annum
(representative of historical rates on fixed principal certificates) on the
assumed $207,000 in Certificates sold to investors. The Credit Agreement is
assumed to bear a weighted average interest rate of 8.8% per annum, which is
representative of historical interest rates.

(2) Adjusted for interest savings consisting of: (i) a $4,051 reduction due to
the redemption of one-half of the Senior Debentures; (ii) a $108 reduction
in amortization of deferred financing fees related to the Senior Debentures;
and (iii) a $2,423 reduction due to an assumed weighted average net pay down
of $65,277 in borrowings under the Credit Agreement. The Credit Agreement is
assumed to bear a weighted average interest rate of 8.8% per annum, which is
representative of historical interest rates.

(3) Adjusted for interest savings of $1,809 due to an assumed repayment of
$49,300 in borrowings under the Credit Agreement. The Credit Agreement is
assumed to bear a weighted average interest rate of 8.8% per annum, which is
representative of historical interest rates.

(4) Tax provision arising from the pro forma adjustments.

(6) As discussed in note (3), the $49,300 proceeds from the 1996 Offering are
assumed to be used to repay borrowings under the Credit Agreement. If the
proceeds were assumed to be used to purchase and retire the Senior
Debentures at a price of 112.75% of the principal amount thereof (including
fees) plus accrued interest, income before extraordinary items per share on
a fully diluted basis would be $0.66. On May 20, 1996, the Company commenced
a tender offer and related consent solicitation with respect to all of the
outstanding Senior Debentures, whereby the Company has offered to pay to
tendering holders, subject to the fulfillment of certain conditions, 110.25%
of the principal amount thereof plus accrued interest and a consent fee
equal to two percent of the principal amount thereof. There can be no
assurances that the Company will be able to purchase the Senior Debentures
pursuant to the tender offer or otherwise. See "Use of Proceeds."

(7) The pro forma weighted average common shares outstanding reflects the
additional shares issued in connection with the 1996 Offering and the 1995
Offering.

P-5
<PAGE> 43

UNAUDITED PRO FORMA BALANCE SHEET
(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
MARCH 31, 1996
-----------------------------------------
PRO FORMA
ADJUSTMENTS
-----------
1996 AS
HISTORICAL OFFERING(1) ADJUSTED
---------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents......................... $ 63,833 $ $ 63,833
Restricted cash................................... 6,102 6,102
Accounts receivable............................... 340,272 340,272
Merchandise inventories........................... 590,675 590,675
Prepaid expenses and other........................ 3,714 3,714
---------- -------- ----------
Total current assets...................... 1,004,596 1,004,596
Property and equipment, at cost..................... 85,985 85,985
Less accumulated depreciation..................... 35,432 35,432
---------- -------- ----------
50,553 50,553
Other Assets........................................ 27,983 27,983
---------- -------- ----------
$1,083,132 $ $1,083,132
========== ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable.................................. $ 609,607 $ $ 609,607
Accrued expenses and other........................ 25,368 25,368
Accrued income taxes.............................. 17,357 17,357
Deferred income taxes............................. 32,809 32,809
---------- -------- ----------
Total current liabilities................. 685,141 685,141
Long-Term Debt
Revolving credit facility......................... 215,000 (49,300) 165,700
Receivables securitization financing.............. 209,860 209,860
Senior debentures................................. 74,293 74,293
Other debt........................................ 1,697 1,697
---------- -------- ----------
500,850 (49,300) 451,550
Other liabilities................................... 7,518 7,518
Stockholders' equity
Common stock...................................... 255 15 270
Capital in excess of par value.................... 171,441 49,285 220,726
Retained earnings (deficit)....................... (275,853) (275,853)
Cost of common stock in treasury.................. (6,220) (6,220)
---------- -------- ----------
(110,377) 49,300 (61,077)
---------- -------- ----------
$1,083,132 $ 0 $1,083,132
========== ======== ==========
</TABLE>

- ---------------
(1) Assumes the Company would have used the net proceeds from the 1996 Offering
of $49,300 to repay borrowings under the Credit Agreement.

P-6
<PAGE> 44

-------------------------------------------------------------
-------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGES IN THE
AFFAIRS OF THE COMPANY OR ITS SUBSIDIARIES SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.......................... 3
Risk Factors................................ 9
Use of Proceeds............................. 11
Price Range of Common Stock and Dividend
Policy.................................... 12
Capitalization.............................. 13
Selected Consolidated Financial Data........ 14
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................ 16
Business.................................... 21
Management.................................. 29
Selling Stockholders........................ 32
Shares Eligible for Future Sale............. 33
Underwriting................................ 34
Legal Matters............................... 35
Experts..................................... 36
Available Information....................... 36
Incorporation of Certain Documents by
Reference................................. 37
Index to Unaudited Pro Forma Financial
Statements................................ P-1
</TABLE>

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4,800,000 SHARES

LOGO

COMMON STOCK
(PAR VALUE $0.01 PER SHARE)

---------------------------

LOGO

---------------------------

GOLDMAN, SACHS & CO.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

SMITH BARNEY INC.

BEAR, STEARNS & CO. INC.

WHEAT FIRST BUTCHER SINGER
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