McKesson Corp and CHC have partnered to launch a new health IT company. The new company, named Change Healthcare, will encompass most of the McKesson Technology Solutions business and “substantially all” of CHC’s business.
The new entity will offer healthcare providers a slate of services including financial, operational and clinical benefits to payers, providers and consumers.
McKesson owns approximately 70% 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.
The creation of Change Healthcare follows an earlier announcement of the agreement which came out in June of last year. Since then, both companies have been working through an integration planning process.
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.
“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 in a statement on the deal. “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.”