Private Equity Firm TPG To Take Majority Stake In Surescripts

An article from

Dive Brief:

• Private equity firm TPG Capital has inked a deal to take a majority stake in Surescripts, the healthcare IT company said Tuesday.
• The e-prescribing giants’ other investors — CVS Health, Cigna-owned pharmacy benefit manager Express Scripts and two pharmacist trade groups — will retain a minority interest, a Surescripts spokesperson told Healthcare Dive. Terms of the deal and specific ownership stakes weren’t disclosed. 
• Surescripts will use the deal to invest in new products and markets while scaling its existing portfolio, a spokesperson said.

Dive Insight: 

Surescripts offers products that electronically send prescription information from providers to pharmacies and shares medication histories, as well as tools for checking patients’ prescription coverage. The company was involved in nearly 24 billion exchanges of patient clinical and benefit information last year, according to a press release.

The e-prescribing giant has reportedly been looking for a buyer for several months. Business Insider reported in April that Surescripts had hired healthcare investment bank TripleTree to explore a sale. 

TripleTree served as the financial advisor to Surescripts on the newly announced deal, the company said in a press release.

A sale to a PE firm makes sense, as it could raise less regulator scrutiny than an investment from a large payer, especially one with its own pharmacy benefit manager, Tyler Giesting, director of consultancy West Monroe’s healthcare and life sciences practice, told Healthcare Dive this spring.

Healthcare IT investments have grown in importance for PE as the firms look away from investments in care delivery, according to a report published last month by PitchBook.

“We expect the tide to keep shifting in favor of healthcare IT as regulatory uncertainties and limited exit opportunities for larger healthcare provider assets push investors to diversify their healthcare exposure away from direct care delivery,” Rebecca Springer, lead analyst for healthcare at PitchBook, wrote in the report. 

The deal with TPG comes more than a year after Surescripts reached a settlement with the Federal Trade Commission over allegations the company had monopolized two e-prescription drug markets. The company argued the yearslong case relied on factual errors and “mischaracterizations” about the economics of the e-prescription market.