Company Spotlight: Four publishing companies acquire health care businesses in Q4 2012-Hearst, Washington Post Co., Elsevier, LexisNexis
February 8, 2013
(Industry Intelligence Inc.)
– Hearst Corp., Washington Post Co., Elsevier B.V. and LexisNexis Group are among the publishing companies in the fourth quarter of 2012 that announced plans to acquire health care businesses—some entering new territory (e.g. Washington Post Co.) while others are deepening their connection to the health care sector (e.g. Reed Elsevier).
• In November, Hearst agreed to acquire Milliman Care Guidelines LLC, which provides clinical health care databases.
• In October, Washington Post Co. agreed to acquire a majority stake in hospice care provider Celtic Healthcare Inc.
• In September, two Reed Elsevier subsidiaries acquired health care-related businesses. Elsevier acquired ExitCare LLC, a patient education and discharge instructions solution provider, and LexisNexis acquired EDIWatch Inc., a provider of health care fraud waste and abuse workflow solutions.
However, the trend might not be so surprising given that the medical and pharmaceuticals sector is No. 2 on Printing Impressions’ “Hot Markets for 2013-2014” list in terms of print potential, amounting to about US$14.6 billion worldwide, with a projected print growth of 8%.
The following highlights information about these companies’ acquisitions as well as market insights from company officials and analysts.
Company: Hearst Corp.
Headquarters: New York, New York
Acquisition Target: Milliman Care Guidelines LLC (based in Seattle)
Details: Upon completion of the deal, Milliman Care Guidelines would be managed as part of Hearst’s health care group, which includes Zynx Health, a provider of evidence-based clinical decision support solutions, and First Databank, a provider of drug information for health care professionals. The terms of the acquisition have not been disclosed.
What the company is saying: Hearst CEO Frank A. Bennack, Jr. noted a rapidly changing health care landscape, a shift to accountable care organizations and continued reliance on clinical decision support that would benefit Milliman, according to a press release issued by Hearst on Nov. 5. Richard P. Malloch, president of Hearst Business Media, said that the company believes Milliman “has a strong opportunity to significantly grow as insurers, hospitals and other caregivers navigate the reimbursement and pre-approval landscape.”
Analyst insight: According to Seth Kneller, VP at TripleTree, which covers the health care industry, the acquisition would strongly position Hearst as “an enabler of actionable content and decision support tools that more closely align clinical delivery workflows with utilization review and reimbursement processes.”
Company: Washington Post Co.
Headquarters: Washington, D.C.
Acquisition Target: Celtic Healthcare Inc. (based in Mars, Pennsylvania)
Details: Washington Post Co. is entering the health care business by agreeing to acquire a majority interest in Celtic Healthcare. The purchase price has not been disclosed. According to a Wall Street Journal article on Oct. 1, Celtic could generate $45 million in 2012.
What the company is saying: Washington Post Co. CEO Donald E. Graham called the acquisition a part of the publisher’s “ongoing strategy of investing in companies with demonstrated earnings potential and strong management teams attracted to our long-term investment horizon,” according to a press release issued on Oct. 1. Graham added that the acquisition fits with the company’s “decentralized operating philosophy.”
Analyst insight: Sheryl Skolnick of CRT Capital Group said in a Wall Street Journal article on Oct. 1: "I'm curious as to why anyone would want to make an acquisition of a reasonably good size home health agency in an environment where Medicare cuts are coming."
Company: Elsevier B.V.
Acquisition Target: ExitCare LLC (based in Lake Elmo, Minnesota)
Details: Elsevier acquired ExitCare, whose products will be incorporated into its portfolio of clinical decisional support content and tools. The financial terms of the transaction has not been disclosed. ExitCare includes an extensive group of nearly 60 domestic and international resellers, including hospital information systems, electronic medical record and other companies.
What the company is saying: According to a press release issued by Elsevier on Sept. 11, ExitCare will provide print, electronic and video patient education content and tools considered key to boosting patient engagement and reducing readmissions, as well as meeting the emerging needs of both hospitals and office-based physicians who want to give their patients a multimedia education experience. "This acquisition allows Elsevier to offer a more comprehensive and better integrated point-of-care decision support solution to our customers," said Jay Katzen, managing director of Elsevier's Clinical Decision Support division.
Company: LexisNexis Group
Headquarters: Dayton, Ohio
Acquisition Target: EDIWatch Inc. (based in Alpharetta, Georgia)
Details: EDIWatch's operations will be integrated into the Health Care business unit of LexisNexis Risk Solutions. According to a press release on Sept. 5, EDIWatch’s portfolio addresses fraud, waste and abuse detection, recovery, and prevention; leverages automated business fraud rules and analytics; and offers user-friendly case management workflow tools and investigatory services. EDIWatch customers include commercial health insurance plans, state Medicaid agencies, and Medicare/Medicaid managed care organizations.
What the company is saying: LexisNexis Risk Solutions CEO James Peck said that combining EDIWatch with LexisNexis public records, data and other capabilities would provide “a comprehensive end-to-end suite of solutions to address the range of payer needs in combating fraud, waste and abuse,” according to a press release. He added, “We are committed to offering our customers improved predictive and investigative efficiencies to assist in their efforts to prevent improper payments."