ExpressScripts to Acquire Benefits Manager eviCore

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Express Scripts said on Tuesday it would buy privately-held specialty healthcare benefits manager eviCore healthcare for $3.6 billion to bolster its medical benefits management business, with the deal adding to adjusted earnings in the first full year.

Reuters reported in May that eviCore was exploring a sale or an initial public offering, hoping for a valuation of more than $4 billion, including debt.

Express Scripts plans to buy Bluffton, South Carolina-based eviCore from current investors including General Atlantic, TA Associates and Ridgemont Equity Partners.

The firm provides healthcare benefits management and administrative services on behalf of clients consisting mainly of commercial health insurers and other third-party payers, including Medicaid Managed Care and Medicare Advantage plans.

Insurers turn to companies such as eviCore to help keep benefit costs down.

The deal is expected to close in the fourth quarter of this year, Express Scripts said, adding that eviCore would operate as a standalone business unit.

Both companies were not immediately available for comment.

Express Scripts’ shares were little changed in morning trading on Tuesday.

The deal is nearly six months after Express Scripts said it might lose its top client Anthem Inc., which has sued the pharmacy benefit manager over claims of being overcharged in March of last year.

Lazard and TripleTree LLC are Express Scripts’ financial advisers in the deal, while its legal adviser is Skadden, Arps, Slate, Meagher & Flom LLP.

J.P. Morgan Securities LLC and Morgan Stanley & Co LLC advised eviCore and Paul, Weiss, Rifkind, Wharton & Garrison LLP is its legal adviser.

(Reporting by Manas Mishra and Divya Grover in Bengaluru; Editing by Savio D’Souza and Bernard Orr)