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McKesson Corp. (NYSE: MCK) is acquiring CoverMyMeds, a technology-enabled company known to automate prescription drug approvals, from private equity firm Francisco Partners. The deal, which follows a previous partnership between the buyer and target, is valued up to $1.14 billion.

The quest for improvements and advancements within technology has been a driving force for M&A across a variety of industries. Healthcare technology is one of the many industries seeing the influence. Recent deals include: Zimmer Biomet Holdings Inc.’s purchase of physical therapy tech manufacturer RespondWell and its comp completed deal for CD Diagnostics, a developer of medical tests designed to advance joint infection treatments; Auris Surgical Robotics Inc.’s purchase of medical robot manufacturer Hansen Medical Inc.; MedData Inc. acquisition of hospital software developer Cardon Outreach; and Thoma Bravo’s deal for medical IT security firm Imprivata (NYSE: IMPR).

CoverMyMeds is a healthcare software company most useful for health insurance companies across the U.S. The target’s software automates electronic prior authorizations (ePA), which is typically manual and time consuming, for more than 500 electronic health record (EHR) systems, 47,000 pharmacies, 700,000 healthcare providers and most health plans. Founded in 2008 by co-founders Matt Scantland and Sam Rajan, CoverMyMeds strives to help clients minimize administrative waste and medical spending caused by prescription abandonment.

The relationship between CoverMyMeds and McKesson dates back to 2010, when both companies aligned missions to improve the business of healthcare. McKesson’s RelayHealth division partnered with CoverMyMeds to offer ePAs to its customers, a service that is still a growing trend. New York Governor Andrew Cuomo signed a bill in November 2016 requiring the Insurance Commission and Superintendent of Financial Services to develop standards for drug ePAs. McKesson provides healthcare information, pharmaceuticals, medical supplies and care management tools across the U.S. The San Francisco-based healthcare company reported revenues of $50.1 billion for the third quarter in fiscal year 2017, up 5 percent year over.

“The entire industry is evolving to meet new macro-level shifts and challenges, such as the increased global nature of healthcare, new entrants into the value chain and expanded patient access,” states Bansi Nagji , a McKesson EVP of corporate strategy and business development, in a previous statement to Mergers & Acquisitions in October 2016. “We have placed a priority on deals that extend our channel influence and provide value-added services in the specialty space.”

Francisco Partners backed Cleveland, Ohio-based CoverMyMeds in 2010. The growth investment supported CoverMyMeds’ expansion across the pharmacy, provider, manufacturer and payer ecosystem. Founded in 1999, Francisco Partners is a private equity firm with more than $10 billion in capital and invests exclusively in the technology sector. The firm was conceived by a group of West Coast private equity and investment bank executives, consisting of: Stephens & Co. founder Sanford Robertson, TA Associates alumnus Benjamin Ball, and TPG Capital's Depanjan Deb and David Stanton. Neil Garfinkel joined the firm from Friedman Fleischer & Lowe. The firm, which raised a $2 billion fund in 2011, has invested in more than 175 tech businesses since its inception.

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