Walgreens Boots Alliance accelerates full acquisition of CareCentrix, makes executive appointment
Walgreens Boots Alliance today announced the acceleration of its plans to acquire full ownership of CareCentrix, expanding its reach into the growing homecare sector and advancing its healthcare long-term growth strategy.
WBA has entered into a definitive agreement to acquire the remaining 45% stake for approximately $392 million, which is based on the exit multiple agreed to at the time of WBA's initial majority investment announcement in CareCentrix.
WBA also announced that John Driscoll, CEO of CareCentrix will assume a new role as executive vice president and president, U.S. Healthcare at WBA, including Walgreens Health, later this month. CareCentrix chief financial officer, Steve Horowitz, will assume the role of CareCentrix CEO.
CareCentrix is an industry leader in the $75 billion post-acute and homecare industry, providing care coordination and outsourced benefit management services. WBA’s full acquisition of CareCentrix follows WBA’s 55% majority investment in the company, which closed on Aug. 31, 2022. The full acquisition is subject to limited customary closing conditions and is expected to close by March 2023.
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“We continue to see strong results and potential for growth from our partnership with CareCentrix. Our full acquisition further accelerates our transformation to become a consumer-centric healthcare company, leveraging innovative platforms that extend our capabilities into fast-growing segments of health care,” said Roz Brewer, CEO of WBA. “CareCentrix is key to offering services to our patients at every stage of the care continuum, and to driving long-term, sustainable growth as part of our U.S. Healthcare strategy.”
CareCentrix currently manages care for more than 19 million members through over 7,400 provider locations, offering a suite of services on an integrated basis to support homecare models — including home nursing, durable medical equipment, home infusion and in-home palliative care. By helping to accelerate the transition of care to patients’ homes, CareCentrix provides one of the core elements to support value-based care on behalf of health plans and providers.
In WBA’s fiscal year 2021, CareCentrix delivered pro forma sales of $1.5 billion. The company will continue as a distinct business and brand within Walgreens following the full acquisition.
“We are thrilled to be part of WBA’s vision to transform local health care and develop new valued-based models,” Driscoll said. “A major component of the future of health care is in the home, and CareCentrix is critical to enabling WBA to serve patients wherever and however works best for them.”
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Commenting on Driscoll's appointment, Brewer said, “John brings a wealth of experience and leadership across many different aspects of health care, all of which will play an important role in delivering on our vision to reimagine local health care for all,” Brewer said. “He has demonstrated high levels of success by building winning teams, and rapidly scaling technology-enabled solutions and analytics that make health care more personal and effective.”
Driscoll will oversee U.S. Healthcare for WBA as the company expands into larger, faster-growing profit pools that drive synergies across the care continuum, including provider enablement and managed service organizations, primary care, population health, home health, post-acute care, specialty pharmacy and retail pharmacy. U.S. Healthcare encompasses integrations with WBA’s market-leading healthcare partners, including VillageMD, Shields Health Solutions and CareCentrix, as well as the organic Walgreens Health business, which focuses on population health through initiatives such as Walgreens Health Corners.
“It is an honor to take this leadership position with a company committed to integrating the key pieces to deliver better health care at lower costs to so many,” Driscoll said. “I look forward to working closely with Roz and WBA’s U.S. Healthcare leadership team to create a truly differentiated experience for consumers across their healthcare journey, while bringing greater value to payers, providers and other partners.”
Driscoll has more than 25 years of deep healthcare expertise. Prior to CareCentrix, he served as president at Castlight Health, a digital healthcare company, and before that, as group president for new markets at Medco (a $70 billion pharmacy benefit manager). He led product development and was part of the executive team that spun Medco out of Merck, building an enterprise that was named the most admired company in healthcare services by Fortune for several consecutive years.
Driscoll also was responsible for Medco’s entry into Medicare, growing the business from start-up to $20 billion in annual revenue. He led Medco’s acquisitions and investments, investing over $10 billion in capital in high-growth companies, including specialty pharmacy Accredo Health. During Driscoll’s tenure, he led retail network contracting, Medco’s data products, Medco International and Medco’s specialty pharmacy business.