Express Scripts’ $3.6 Billion Acquisition of eviCore healthcare

Express Scripts’ financial advisors on this acquisition are Lazard and TripleTree, LLC. Its legal advisor is Skadden, Arps, Slate, Meagher & Flom, LLP. eviCore’s financial advisors are J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC. Its legal advisor is Paul, Weiss, Rifkind, Wharton & Garrison, LLP.

Express Scripts Holding Company (NASDAQ: ESRX) today announced that it has reached an agreement to acquire privately-held eviCore healthcare, the industry leader in evidence-based medical benefit management services, for $3.6 billion. Combining Express Scripts’ leading pharmacy benefit management offering and eviCore’s highly complementary medical benefits management (MBM) platform will create a uniquely comprehensive patient benefit management solution.

Express Scripts is acquiring eviCore from current investors including General Atlantic, TA Associates, and Ridgemont Equity Partners. The transaction is subject to customary regulatory approvals and closing conditions, and is expected to close in the fourth quarter of 2017.

eviCore, which manages medical benefits for 100 million people, offers a broad range of integrated MBM solutions that drive significant and immediate cost reductions, and improved quality care outcomes. eviCore has leading positions managing benefits in categories including radiology, cardiology, musculoskeletal disorders, post-acute care and medical oncology – all important therapeutic areas that are in need of greater cost management. eviCore contracts with health plans and commercial clients to better ensure appropriate use of healthcare services. eviCore has approximately 4,000 employees and will operate as a standalone business unit within Express Scripts.

The acquisition of eviCore will give Express Scripts an attractive entry point into a growing market. Today, pharmacy is an industry with approximately $400 billion in annual spend. Healthcare spend represents nearly $3.4 trillion. Medical benefit management is a large and growing market with more than $300 billion spent annually in the areas eviCore manages today. Establishing a cornerstone platform in this market will enable Express Scripts to build a uniquely comprehensive suite of solutions, with significant opportunities for cross-selling to both client bases.

The combination of Express Scripts’ leading independent PBM model and eviCore’s industry-leading medical cost containment capabilities across an expanded client base will create an even more powerful partner for our clients, fully aligned with the interests of patients and payers. This will further differentiate Express Scripts and position the company to take advantage of the transition to value-based care and the increasing demand from payers for a more comprehensive set of service offerings and solutions.

Excluding transaction related expenses and amortization of intangibles, Express Scripts expects the acquisition to be accretive to adjusted diluted earnings per share in its first full year of operation.

The Skadden team includes: M&A partners Howard Ellin (Picture) and Kenneth Wolff, and associates Thad Hartmann and Marcel Rosner; Executive Compensation and Benefits partner Regina Olshan and associate Young Park (Boston); Banking partner Stephanie Teicher; Corporate Finance partners Stacy Kanter and Ryan Dzierniejko; Tax partner Gavin White; and Antitrust and Competition partner Clifford Aronson.

 

Involved fees earner: Howard Ellin – Skadden Arps Slate Meager & Flom; Kenneth Wolff – Skadden Arps Slate Meager & Flom; Thad Hartmann – Skadden Arps Slate Meager & Flom; Marcel Rosner – Skadden Arps Slate Meager & Flom; Regina Olshan – Skadden Arps Slate Meager & Flom; Young Park – Skadden Arps Slate Meager & Flom; Stephanie Teicher – Skadden Arps Slate Meager & Flom; Gavin White – Skadden Arps Slate Meager & Flom; Clifford Aronson – Skadden Arps Slate Meager & Flom; Stacy Kanter – Skadden Arps Slate Meager & Flom; Ryan Dzierniejko – Skadden Arps Slate Meager & Flom;

Law Firms: Skadden Arps Slate Meager & Flom;

Clients: Express Scripts Holding Company;