Deal of the Week: McKesson/RxCrossroads
The largest deal announced in a very sluggish week for healthcare announcements was McKesson Corp.’s (NYSE: MCK) $735 million acquisition of RxCrossroads from CVS Health Corp. (NYSE: CVS). RxCrossroads provides a range of specialty distribution, pharmacy and patient support to biopharmaceutical manufacturers. CVS acquired it in 2015 as part of its $12.7 billion deal for Omnicare Inc., which specialized in managing pharmaceutical care in long-term care and assisted living facilities. Omnicare paid $235 million for RxCrossroads in 2005, when it reported annualized revenue of $46 million. For McKesson, RxCrossroads will help it to capitalize on what the coming boom in the specialty... Read More »
Stat of the Week: CVS’s 10.9x EBITDA
If you can’t beat ’em, buy ’em. Or be bought. That’s the path Aetna (NYSE: AET) is taking, perhaps, as the healthcare industry reacts to news that the health insurer is in talks with CVS Health Corp. (NYSE: CVS) to be acquired for $200 per share, approximately $66 billion. The deal may never be consummated, but it’s gotten a lot of analysts weighing in on the paradigm shift it would bring to the industry. Frank Morgan of RBC Capital Markets gave the nod to vertical integration between managed care organizations, pharmacy benefit managers (PBMs) and providers, given that the managed care companies’ push for horizontal integration in 2013 ended badly... Read More »
Deal of the Week: Express Scripts Diversifies
Express Scripts (NASDAQ: ESRX) didn’t hedge its bets that online retail giant Amazon will enter the prescription drug delivery market. On October 10, the leading pharmacy benefit manager (PBM) acquired South Carolina-based eviCore healthcare from its current investors, including General Atlantic, TA Associates, and Ridgemont Equity Partners, for $3.6 billion. The deal follows rumors that Amazon is contemplating entering the prescription drug delivery market in an attempt to improve price transparency for consumers and reduce out-of-pocket costs. Last April, Express Scripts lost Anthem, Inc. (NYSE: ANTM) as a client, and with it, 18% of annual revenue. The threat of... Read More »
Deal of the Week: Centene/Fidelis Care
Centene Corporation (NYSE: CNC), the self-declared leader in government-sponsored healthcare in the U.S., has taken over another state. As larger rivals like Anthem (NYSE: ANTM) and UnitedHealth Group (NYSE: UNH) quit the individual health insurance exchanges around the country, Centene has marched in. In its first major deal since July 2015, Centene is now tops in New York State, thanks to its $3.75 billion deal for not-for-profit Fidelis Care. Fidelis Care provides health insurance coverage through Qualified Health Plans, Child Health Plus, Essential Plan, and Medicaid, available through the New York State of Health Marketplace, as well as through the Medicare Advantage, Dual Advantage,... Read More »
Mayo Clinic Sheds its Managed Care Segment
Two not-for-profit managed care companies are joining forces, bringing the year’s total to 13 deals in the sector. On August 17, 2017, Medica Health Plans, Inc., which provides health care coverage in the employer, individual, Medicaid and Medicare markets in Minnesota, Iowa, Kansas, Nebraska, North Dakota, South Dakota and Wisconsin, announced it was acquiring Mayo Clinic Health Solutions. Financial terms were not disclosed. The target, a division of Mayo Clinic, is a health benefits management company and licensed third party administrator that provides plan administration services and health care products to 260,000 members through 28 customers. Mayo Clinic stated the deal sets... Read More »Schedule a demo
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