Coram Healthcare Corp.'s $310 million purchase of Caremark International's home infusion unit last week reunites Coram Chairman and Chief Executive Officer James Sweeney with the business he founded.
Sweeney, 52, pioneered the development of the home infusion industry, forming Home Healthcare of America in 1978 and later changing the company's name to Caremark.
He operated Caremark for nine years before selling it to Deerfield, Ill.-based Baxter International in 1987 for $586 million.
The year of the sale, Caremark generated $250 million in revenues. However, the company had demonstrated a whopping 50% annual growth in revenues and 30% annual increase in earnings in a virtually untapped home infusion market-all of which helped justify the $586 million purchase price.
After the sale of Caremark, Sweeney moved on to become chairman and CEO of McGaw, an Irvine, Calif.-based intravenous supply company. He also served on the board of directors of Medical Care America before resigning in 1993. He was named Coram chairman in February 1994.
Sweeney was unavailable for comment last week. However, Patrick Fortune, Coram's president, said the Denver-based company will continue to look for acquisitions that fit into its strategy of becoming the largest alternate-site healthcare provider in the nation.
"When you're growing from a $500 million company to a $2 billion company, obviously a significant amount of acquisitions are going to be part of that," Fortune said. Buying Caremark's home infusion business "fits into that strategy."
Fortune declined to comment on published reports that Coram's next acquisition may be Abbey Healthcare Group, a home-care company based in Costa Mesa, Calif.
Coram expects to eliminate duplication where Caremark's home infusion businesses overlap in some 66 markets nationwide, mostly in metropolitan areas.