The $1.3 billion acquisition of CoverMyMeds LLC – unmatched in tech history statewide – has paid dividends in continued job growth as well as attention.
From the start, CEO Matt Scantland said the purchase by McKesson Corp. was “all about growth.” Indeed, CoverMyMeds added about 100 jobs to hit 600 by fall, and recently said it’s hiring “hundreds,” without specifying how many hundreds, at its Columbus headquarters, Cleveland office and telecommuters.
“This deal secures the lasting success of CoverMyMeds,” CEO Matt Scantland said in an interview with Columbus Business First after the announcement. “This deal is an amazing thing for them and for us, if we just keep growing.”
The January announcement brought the first billion-dollar exit for an Ohio tech company, a milestone entrepreneurs and investors have awaited not just for the reputational boost but the future rainmaking when Ohioans who profited on the deal start new ventures or invest in local companies.
McKesson, the $198.5 billion San Francisco health distribution giant, did not require any cost-cutting or sacrifices in award-winning company culture with the deal that closed in April. Scantland also negotiated for rank-and-file employees to get a chance of stock options.
The company is expanding its software, which automates the tedious process of obtaining an insurance prior authorization to fill a prescription. It’s working with manufacturers, doctors, pharmacies and insurers on other improvements to prescribing.
First announced at $1.1 billion up front, the closing payment was $1.3 billion, according to regulatory filings. Another $160 million could be paid to original owners and investors contingent on 2018 and 2019 performance, a total of nearly $1.5 billion.
McKesson valued CoverMyMeds’ assets at $53 million, saying the purchase price reflected $500 million worth of customer relationships and $855 million of goodwill, “which reflects the expected future benefits of certain synergies and intangible assets.”
Technically, the breakup and sale of New Albany-based Bob Evans was bigger, with the restaurant and packaged food businesses totaling just over $2 billion. But rather than a triumph, the sales came at the end of a protracted battle with an activist investor. And neither out-of-state buyer has offered assurances about the future of the former head office. Also, that deal has shown up in two other year-end reviews, so there.
Read the full story at Columbus Business First.