McKesson Corp. said Jan. 25 that it has agreed to buy CoverMyMeds for about $1.1 billion. The deal includes another $300 million of consideration contingent upon CoverMyMeds financial performance through fiscal 2019, McKesson said. CoverMyMeds, of Columbus, Ohio, is a healthcare software company backed by Francisco Partners.
San Francisco, Calif., Jan. 26, 2017 – Francisco Partners, a leading technology-focused private equity firm, today reported the pending acquisition of CoverMyMeds LLC by McKesson Corporation (NYSE:MCK) for up to $1.4 billion, a portion of which is contingent upon the company’s future financial performance.
Francisco Partners’ 2014 growth investment in CoverMyMeds helped support the company’s expansion across the pharmacy, provider, manufacturer and payer ecosystem. The company recently reported that it has now helped more than 50 million patients appropriately access medication so that they lead healthy lives.
“It has been a pleasure to partner with the CoverMyMeds’ founders and management team to grow this important business,” said Chris Adams, partner at Francisco Partners. “CoverMyMeds solves a real pain point for doctors, pharmacies, manufacturers and payers. We are thrilled to have helped the CoverMyMeds team build their business. The company is in a tremendous position, and we wish them continued success as part of McKesson.”
CoverMyMeds was founded in 2008 with the mission to help patients get the medication they need to live healthy lives. CoverMyMeds’ electronic prior authorization (ePA) service automates and accelerates the prescription approval process, which otherwise is a manual, time consuming, paper-based workflow. By ensuring appropriate access to medications, CoverMyMeds helps patients get the medication they need to live healthy lives while helping customers avoid administrative waste and unnecessary medical spending caused by prescription abandonment.
“Francisco Partners has been an invaluable partner to us,” said Matt Scantland, CoverMyMeds Co-Founder and CEO. “Their team offered support, thought leadership, and capital to help us grow rapidly and strategically into a business that will continue to have a huge impact and achieve lasting success with McKesson. We’re very proud of what we were able to accomplish together.”
McKesson and CoverMyMeds have aligned missions to improve the business of health care, and have partnered together to offer solutions for pharmacies since 2010. The pending acquisition by McKesson allows both companies to enhance the value they provide to their customers across the health care spectrum. Once the transaction closes, CEO and co-founder Matt Scantland will continue to lead the company with the existing leadership team, who will run the company from their Columbus and Cleveland, Ohio operations.
CoverMyMeds is a leader in Electronic Prior Authorization (ePA) solutions and one of the fastest growing health care technology companies in the U.S.CoverMyMeds’ software suite automates the medication prior authorization process for more than 500 electronic health records (EHR) systems, 47,000 pharmacies, 700,000 providers and most health plans and PBMs. By ensuring appropriate access to medications, the company helps its customers avoid billions of dollars each year in administrative waste and avoidable medical spending caused by prescription abandonment. Visit www.covermymeds.com for more information.
About Francisco Partners
Francisco Partners is a leading global private equity firm, which specializes in investments in technology businesses. Since its launch over 16 years ago, Francisco Partners has raised over $10 billion in capital and invested in more than 175 technology companies, making it one of the most active and longstanding investors in the technology industry. The firm invests in opportunities where the firm’s deep sectoral knowledge and operational expertise can help companies realize their full potential.