Drug distributor McKesson Corp.'s technology business has officially merged with Change Healthcare, a revenue cycle and analytics firm. The new company will be called Change Healthcare, combining nearly all of Nashville-based Change's business with the majority of San Francisco-based McKesson's tech business.
McKesson owns 70% of the combined company, with the remainder being held by Change stockholders, including investment firms Blackstone Group and Hellman & Friedman. But McKesson has said that it plans to sell its share in the company soon after the firm completes an initial public offering, which is expected in the next 18 months.
The deal allows McKesson to largely part ways with the majority of its technology business, including revenue cycle and analytics, while retaining technology platforms that are more in line with its much-larger drug distribution business. McKesson's technology segment was often a drag on its overall earnings when compared to the pharmaceutical business.
The combined company has a significantly broader portfolio than the two technology firms would have had apart, said Change Healthcare CEO Neil de Crescenzo, who will remain CEO of the new company.