Express Scripts Holding Company (NASDAQ: ESRX), the largest stand-alone pharmacy-benefits manager, announced that it agreed to buy EviCore healthcare, which is a privately-held medical benefit management company, for $3.6 billion. Shares of the company were down 2.5% in premarket trading Tuesday after the announcement.
According to Express Scripts, the deal is expected to close in the fourth quarter of 2017, after being approved by regulators. After the deal, EviCore will operate as a standalone business unit in Express Scripts. In the deal, Lazard Ltd. and TripleTree LLC advised Express Scripts, while JPMorgan Chase & Co. and Morgan Stanley advised EviCore.
In 2014, EviCore was created in a merger of two privately held companies, CareCore National LLC and MedSolutions Inc, and now, it has around 4,000 employees.
Currently, Express Scripts is facing with challenges, such as the potential entry of Amazon into the business of managing prescription-drug benefits, and the possible loss of Anthem Inc, which is the company’s largest customer and a health-insurance giant.
The deal with EviCore will benefit Express Scripts in several aspects. After buying EviCore, Express Scripts could broaden its reach beyond prescription drugs, and its main business of managing prescription-drug benefits for health plans, employers and unions, could be complemented. Express Scripts also said that the combination will provide chances for cross-selling to both client bases.