In an announcement released this morning, MSC has sold their pharmacy division to rival Express Scripts, Inc.
Rumors had been circulating for some time about a potential merger of MSC with rival PMSI-Tmesys, or of a deal wherein MSC would buy PMSI’s ancillary service lines business (durable medical equipment, home health care, etc).
Since the loss of Liberty Mutual’s pharmacy contract (MSC covered one half of the country with Progressive Medical handling the rest) to Progressive Medical last year, MSC has been able to regain momentum. According to MSC CEO Joe Delaney (from a conversation at RIMS in April) the company had essentially sold enough new business to make up for the loss of Liberty, and new business opportunities for 2008 have been plentiful.
Express has long had the second position in the industry behind leader PMSI; the newly merged entity will be a formidable competitor and may well take over the industry leader spot. MSC’s pharmacy revenues totaled close to $200 million.
Sources close to the deal indicated the purchase price is $248 million.
The deal will close within a few weeks, barring any anti-trust issues which sources do not expect to be a factor.
Meetings are starting this morning in MSC’s headquarters in Jacksonville, FL to start the customer contact outreach. They will also begin the “who does what from where’ conversation, as it appears no decisions have been reached regarding leadership of the newly merged entity.
Note – this deal is for the pharmacy business only; MSC will keep its ancillary services operations and it looks like current CEO Joe Delaney will stay in his current position. Delaney has done a good job turning the company around, and he will now be able to focus on this sector. I’d expect that MSC may now start (if they aren’t already) looking for acquisitions in this space.
Jun
13
