McKesson and Change Healthcare Complete the Creation of New Company
McKesson Corp. and Change Healthcare Holdings Inc. have announced the completion of their previously announced agreement to create a new healthcare information technology company. The new company is named Change Healthcare and combines substantially all of CHC’s business and the majority of McKesson Technology Solutions (MTS).
By uniting the majority of MTS’ businesses with CHC, the new company will inspire a better healthcare system through a broad set of complementary capabilities that will deliver wide-ranging financial, operational and clinical benefits to payers, providers and consumers. From an interconnected and integral position at the center of healthcare, the new Change Healthcare will be a collaborative catalyst for accelerating its customers’ and partners’ paths to value-based care and better engagement with consumers.
“Over the last several years, our industry has experienced a continued shift toward value-based care, requiring an increasingly consumer-centered approach to healthcare,” said Neil de Crescenzo, Chief Executive Officer, Change Healthcare. “Change Healthcare will be distinctly positioned to leverage its data, analytics and forward-thinking insights to bring new innovative solutions to payers, providers and consumers as they strive to achieve the best healthcare outcomes as efficiently as possible in this new environment.”
“We are thrilled to have completed this combination of two great organizations. Our nearly 15,000 team members will be working with our collective customers and partners to provide a stronger, increasingly collaborative and more efficient healthcare system that enables better healthcare outcomes,” continued de Crescenzo. “I’m confident that Change Healthcare’s expertise and comprehensive offering of solutions will not only deliver near- and long-term value for our customers and partners, but also help drive the journey toward improved lives and healthier communities.”
In addition to Neil de Crescenzo, previously announced as Chief Executive Officer of Change Healthcare, the following individuals will comprise the executive leadership team of the new company:
- Randy Giles, EVP & Chief Financial Officer
- Rod O’Reilly, EVP & President, Software and Analytics
- Erkan Akyuz, EVP & President, Imaging, Workflow and Care Solutions
- Kris Joshi, Ph.D., EVP & President, Network Solutions
- Pat Leonard, EVP & President, Technology-Enabled Services
- Mark Vachon, EVP, Sales and Operations
- Loretta Cecil, EVP & General Counsel
- Alex Choy, EVP, R&D/IT & Chief Information Officer
- Linda Whitley-Taylor, EVP & Chief People Officer
- W. Thomas McEnery, EVP & Chief Marketing Officer
- Megan Callahan, SVP & Chief Strategy Officer
Since the announcement of this transaction on June 28, 2016, both McKesson and CHC have engaged in measured integration planning within the appropriate parameters. Now that the transaction has closed, integration activities will accelerate with a critical focus on ensuring customer service continuity and accelerating innovation efforts to bring new solutions to address customer needs. Over the coming months, integration plans will be shared with customers and partners to ensure they realize the full value of the new organization in helping them achieve their objectives.
As previously announced, the new organization will leverage the Change Healthcare name, but introduces a new logo, brand positioning and visual identity to reflect the broader capabilities of the unified organization. The migration to the new brand will happen over the next year. All brand migration activities and the timing of those activities will be handled transparently with the company’s customers and partners. Information about both MTS’ and CHC’s contributed products and solutions will be available through www.changehealthcare.com.
McKesson owns approximately 70 percent of Change Healthcare, with the remaining equity ownership held by CHC stockholders, including Blackstone and Hellman & Friedman. The new company is jointly governed by McKesson and CHC stockholders.
In conjunction with the creation of the new company, Change Healthcare raised approximately $6.1 billion in debt, which was utilized to fund cash payments of approximately $1.25 billion to McKesson and approximately $1.75 billion to CHC stockholders, cover transaction costs and repay approximately $2.8 billion of existing CHC debt.
“Today marks an exciting step forward to achieve enhanced benefits for our customers, employees and stockholders,” said John H. Hammergren, Chairman of the Board, Change Healthcare, and Chairman and Chief Executive Officer, McKesson Corporation. “I want to thank all of the employees who made today possible and who will continue the important work of building an industry-leading company that will help make the vision of value-based care a reality for payers, providers and consumers.”