AmerisourceBergen Corp. on Thursday said it is pulling the plug on its PharMEDium Healthcare Holdings Inc. unit after more than two years of regulatory and operational issues at the compounding business.

The Valley Forge, Pa., pharmaceutical-products company said it conducted a comprehensive strategic and financial review of PharMEDium, concluding that shutting the business down was the best path forward.

Amerisource said PharMEDium is ending production immediately, with all operations slated to end this year. Amerisource said it would encourage the roughly 1,000 employees affected by the closure to apply for other positions within the company.

Amerisource in late 2015 agreed to buy PharMEDium, which provides outsourced compounded sterile preparations to hospitals, from buyout firm Clayton Dubilier & Rice for about $2.58 billion in a move aimed at expanding its service offerings for health systems.

However, the unit ran afoul of federal regulators over quality-control issues, and Amerisource in late 2017 suspended production at the unit’s largest plant, in Memphis, Tenn., following an inspection by the U.S. Food and Drug Administration.