Pharmacy benefit manger Express Scripts will acquire medical benefits management company EviCore Healthcare for $3.6 billion, which will give the company an entry point into a growing market, the company announced Tuesday in a securities filing.
Express Scripts will acquire EviCore from current investors, including General Atlantic, TA Associates and Ridgemont Equity Partners. The acquisition, which marks the latest deal in a rapidly consolidating healthcare industry, is expected to close by the end of the year, following customary regulatory approvals.
"The greatest opportunity to improve healthcare is by reducing wasteful spend and overutilization while delivering quality outcomes," EviCore CEO John Arlotta said in a statement. "Together, EviCore and Express Scripts will be uniquely positioned to tackle these problems."
EviCore manages medical benefits for 100 million people in a growing $300 billion market. There will be opportunities to "cross-sell to both client bases" amid the industry-wide transition to value-based care and increasing demand from payers for more comprehensive services, executives said.
Express Scripts inked the deal to add revenue resources, potentially softening the blow from some headwinds it's facing. The company announced in April that Anthem, its biggest client, will not renew its contract set to expire at the end of 2019. PBMs are also enduring legal battles and widespread criticism for their role in rising drug prices.
"Together with EviCore, Express Scripts will be an even more powerful partner in managing costs for patients and payers, bringing us closer to our goal of becoming the nation's leading patient benefit manager," Express Scripps CEO Tim Wentworth said in a statement. "By further strengthening our independent model and creating numerous opportunities for growth, the acquisition of EviCore will deliver value for our clients, patients, providers and shareholders."