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Tabula Rasa seeks buyer for PrescribeWellness

Mar 30, 2022
Red Cross with tear signifying sales

Illustration: Gabriella Turrisi/Axios

Tabula Rasa HealthCare (Nasdaq: TRHC) is exploring options for its PrescribeWellness and medication therapy management (MTM) businesses, sources tell Sarah.

Why it’s the BFD: Amid deteriorating share performance, Tabula in recent months has been vocal about its intent to divest non-core assets to improve profitability, strengthen the balance sheet and become and remain cash flow positive by Q3.

  • After announcing in February a letter of intent to sell DoseMeRx, a precision dosing tool used by pharmacists and physicians, this is another potential step in that direction.
  • Shares of Tabula Rasa have fallen nearly 87% over the last 12 months.

What’s happening: Advanced discussions are underway with a focused group of potential strategic buyers that includes logical PE-backed players, sources say. Citigroup is providing financial advice on the potential divestitures, they say.

  • PrescribeWellness, a CRM (customer relationship management) tool that’s integrated with over 10,000 independent pharmacy operating systems, “has grown well, is a great asset, but it probably could have grown faster,” one source notes.
  • Tabula Rasa scooped up PrescribeWellness less than three years ago for $150 million.
  • Its MTM business, which does TK, has been more challenged, having lost its CVS contract last year.

Be smart: The timing is not only logical given Tabula’s share performance. Pharmacy-focused technology solutions such as PrescribeWellness are a much more understood area of the market than it was 18 months ago.

  • Why? There’s been a lot of relevant investment activity.

Zoom in: Sources say the best comp for PrescribeWellness is OmniSYS, which NexPhase Capital in December agreed to sell to health care IT company XIFIN.

  • A year earlier Avista Capital Partners bought XIFIN from GTCR.
  • And, in May 2021, BlackRock’s perpetual capital fund agreed to acquire a majority interest in Transaction Data Systems, a pharmacy management solutions and services company, from GTCR.
  • Also relevant is RedSail Technologies, a two-year-old investment of Francisco Partners.

Yes, and: Omnicell, whose pharmacy-focused hardware and software is dominant in hospitals, could be a logical buyer as it has been trying to get into more independent pharmacies, one source notes.The bottom line: There’s a huge opportunity to improve efficiencies and lower costs in the pharmacy industry, and the end-market experiencing heightened headwinds — like a tight labor supply — stemming from the global pandemic.

  • Amid the pandemic, pharmacies’ role as a centralized location for care was elevated.
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