Premier to pay $325 million for Innovatix, Essensa Ventures
Healthcare improvement company Premier Inc. will acquire group purchasing organizations Innovatix and Essensa Ventures for $325 million, the company announced Monday. The transaction is expected to close before the end of the year.
Premier, based in Charlotte, NC, currently owns a 50% interest in Innovatix. GNYHA Holdings, an affiliate of the Greater New York Hospital Association, currently owns the other 50% of Innovatix as well as 100% of Essensa. Essensa, according to its website, already was affiliated with Premier through a contractual relationship.
“As long-standing business partners with GNYHA, we will integrate these assets and customer segments with our existing continuum-of-care business and expect to achieve even greater scale for top-tier pricing in both the acute and non-acute markets,” Susan DeVore, president and CEO of Premier, said in a statement. “These capabilities are critical to address the changing needs of healthcare, where the drive toward population health management and lower cost of care requires a cross-continuum reach.”
Innovatix and Essensa both are helmed by President and CEO John Sganga, who will continue to lead the companies, and are located in the same offices in New York City, where they will remain headquartered. Sganga will report to Premier Chief Operating Officer Michael J. Alkire. Innovatix and Essensa will be integrated into and reported as part of Premier's supply chain services segment.
Innovatix serves more than 32,000 facilities, including senior living communities, independent medical oncology practices and long-term care and other types of pharmacies. Essensa serves senior nutrition centers, long-term acute care facilities, hospice and home health agencies, clinical laboratories, ambulatory and diagnostic imaging centers, colleges and universities, first responders, charitable/religious organizations, municipalities and other commercial markets.
“Combined, we expect the partnership to provide greater savings for members, committed and stable volumes for our contracted suppliers, and revenue and earnings growth to Premier,” Sganga said.
Premier expects to use its existing credit line to finalize the purchases. Under the terms of the purchase agreement, Premier will pay GNYHA Holdings up to an additional $43 million if the acquired companies achieve certain performance targets in fiscal year 2017.