Months after splitting off from McKesson Corp., Change Healthcare made two deals to buy back its pharmacy business and sell its analytics business.
The company bought back eRx Network, its former pharmacy unit, for $212.9 million plus cash on the balance sheet. The deal would reincorporate eRx Network, which serves more than 59,000 pharmacies, back into the Nashville-based health IT company’s systems. eRx network generated about $67 million in revenue between February 2019 and February 2020.
Change Healthcare CEO Neil de Crescenzo said the deal would give the company the opportunity to enter new markets, and offer a more comprehensive set of services to its healthcare clients.
“As a leader in delivering advanced technology solutions for pharmacies, providers, and pharmaceutical companies, eRx aligns with our strategy to reduce costs, improve outcomes, and enhance consumer engagement for our customers,” de Crescenzo said in a news release.
After merging with McKesson in 2017 to form a new company called Change Healthcare, the company spun out eRx Network to former shareholders, including CEO Neil de Crescenzo and private equity firm Blackstone Group. In late February, McKesson exited the company through an exchange offer, triggering an option for Change Healthcare to buy back eRx Network.
In a separate deal, Change Healthcare sold its connected analytics business to consulting company Kaufman, Hall & Associates. The connected analytics business segment counts more than 300 hospitals and health systems as its customers.
Kaufman Hall, which has more than 3,000 clients in healthcare, higher education and finance, said the deal would build out its existing data solutions. As for Change Healthcare, de Crescenzo said the deal would help the company better focus its resources.
“The sale of the Connected Analytics business aligns with our previously stated strategic intent to concentrate on the areas of our business where we can drive the greatest impact for our customers, through our Change Healthcare platform,” he said in a news release.
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