SXC Health Solutions Corp. (Nasdaq: SXCI) agreed on Wednesday to buy fellow pharmacy benefit manager Catalyst Health Solutions Inc. (Nasdaq: CHSI) for about $4.4 billion in cash and stock, to expand its presence in the business of paying and processing prescription drug claims.

The move comes at a time of consolidation for drug benefits managers as the industry gains importance following last year's new U.S. health care law overhaul that heightened focus on reducing costs in the health care sector. Pharmacy benefits managers, or PBMs, use their large purchasing power to negotiate lower drug prices for health plan sponsors and members.

A few weeks ago, two of the biggest companies in the industry, Express Scripts Inc. and Medco Health Solutions Inc. received federal regulators' approval to merge in a $29.1 billion deal -- the industry's biggest merger.

Under the terms of the agreement, Catalyst investors will receive $28 in cash and 0.6606 shares of SXC stock for each Catalyst share, which implies a purchase price of $81.02 per Catalyst share. That is a 28 percent premium to Catalysts' closing price on Tuesday, the companies said today in a statement.

The companies pegged the value of the deal at roughly $4.4 billion, though it is not clear whether this figure includes the assumption of debt. Upon the closing of the deal, SXC shareholders will own 65 percent of the combined company and Catalyst shareholders will own the rest.

The combined company will be headquartered in Lisle, Ill., which is where SXC is based. Catalyst is based in Rockville, Md., and the combined company plans to maintain a presence there.

While we are confident in our future prospects as a stand-alone company, the opportunities presented by this combination are more compelling, David T. Blair, chairman and chief executive officer of Catalyst, said in the statement. This transaction provides attractive and immediate value to Catalyst shareholders, as well as the ability to participate in the significant upside potential of the combined company.

The deal is expected to close in the second half of 2012 and to start giving a boost to SXC's adjusted earnings in 2013. But SXC also expects annual interest expenses of around $70 million due to $1.7 billion in debt financing needed for the deal.

SXC Chief Executive Mark Thierer will serve as chairman and CEO of the combined company. Catalyst CEO David T. Blair is expected to stay on for a transition period.

Shares of Catalyst Health Solutions, Inc. (Nasdaq: CHSI) soared 34.14 percent, or $21.69 a share, to close at $85.23 in Wednesday's trading. Shares of SXC Health Solutions Corp. (Nasdaq: SXCI) closed up 11.33 percent, to $89.36 a share.