Couple quick items from the never-boring world of workers’ comp services…
First up, OneCall is kinda/sorta taking over Spreemo’s workers’ comp imaging business. Not sure how to characterize the “deal”, but it sounds like OCCM is just going to handle the operations, and isn’t paying Spreemo. While Spreemo had done a credible job entering the imaging market, establishing a brand image and gaining some traction, there have been reports of provider payment challenges of late. The continuing price pressure from lowered fee schedules has made the imaging business less attractive as well.
Not sure what Spreemo is going to be doing going forward, as more than one customer told me they were pretty disappointed to hear about the transaction in the form of a press release. Whether this does lasting damage to the brand they so carefully built is the go-forward question.
Looks like Express Scripts paid $250 million or, perhaps, $375 million for myMatrixx. That’s what I get from reading ESI’s latest 10Q.
The $250 million figure comes from financials on pages 10 and 36.
The additional $125 million (+/-) comes from this on page 42…
On May 17, 2017, we issued 2.0 million shares of our common stock in connection with an acquisition. We issued shares in reliance upon the exemption contained in Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction not involving a public offering.
Here’s hoping the price was cash AND stock; Phil Walls, Artemis Emslie, Steve McDonald Craig Rollins and crew built a very good PBM and deserve ample rewards.
Finally, the man behind the OneCall and Genex deals is leaving Apax Partners. Buddy Gumina is departing for places unknown. While Genex has done pretty well under Peter Madeja’s able leadership, OCCM continues to struggle – and is highly unlikely to generate any kind of a return to Apax (OCCM was one of, if not the, largest single Apax investment).
Sources indicate OCCM’s financials are pretty stagnant, with quarterly earnings flat, debt still in the $1.9 billion range, and gross leverage in the 8 – 9x range. The company has spent a ton of cash on systems changes intended to fix some of the customer service issues that plagued OCCM; final implementation is scheduled for 2018. There are some reports that service is picking up a bit, altho that is spotty.
What does this mean for you?
Good investments pay off. Bad investments don’t.