PMSI and Progressive Medical Merger Causes Workers Comp Buzz
PMSI and Progressive Medical Merger shows that small WC companies may not exist much longer in the insurance landscape. The buzz at the end of last week and over the weekend was the surprising merger of two Workers Comp service titans.
The merger actually made sense from a financial standpoint as these two companies’ lines of service will complement each other very well.
The WC ancillary service market has long been contracting to a few major players. The buyout and merger fever may just be a premonition of the future.
If one wanted to survey the “new” Workers Comp landscape, they had to look no further than the 2012 LRP Las Vegas conference. Many of the booth workers had commented they were being bought out or had just acquired some type of ancillary service company.
PMSI was one of the WC originals for prescriptions, TENS units (are they still in use?), durable medical equipment, and other related services. PMSI had and has always done a great job of face-to-face marketing.
Progressive Medical seemed to be one of the “late entrants” into the ancillary services market. However, their stellar PBM services were cutting edge at the time. The press release for Progressive Medical can be found here. For convenience the press release on Progressive’s website is presented below.
Progressive Medical and PMSI announced today that the two companies have entered into a definitive agreement to merge. The transaction is expected to close in the fourth quarter subject to receipt of regulatory clearance. The combined company, which will be led by Executive Chairman Eileen Auen from PMSI and Co-CEOs Emry Sisson and Tommy Young from Progressive Medical, will deliver comprehensive workers’ compensation pharmacy benefit management services including end-to-end pharmacy, ancillary and settlement solutions.
“Bringing together the resources and deep industry expertise of these two companies will enable the combined organization to continue to drive product innovation in the workers’ compensation marketplace while delivering operational and service excellence and ever improving clinical and cost containment services to our clients,” said Tommy Young, Co-CEO of Progressive Medical.
Eileen Auen, Chairman and CEO of PMSI, stated “The PMSI leadership team is delighted to partner with Progressive Medical. We will continue to deliver customized solutions to our clients, and I am personally excited about working closely with the combined team to bring unique solutions to our customers.”
“This merger will drive increased efficiency in the workers’ compensation business,” according to Emry Sisson, Co-CEO of Progressive Medical. “We will strategically leverage the capabilities of the combined organization to bring even greater value to our customers.”
Funds managed by Kelso & Company have agreed to acquire a significant ownership stake in
the combined company. StoneRiver Group, the controlling shareholder of Progressive Medical,
will continue to be a significant shareholder in the combined business.
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