St. Louis Corporate Mergers, Acquisitions & Relocations

New and changing stores, restaurants, and businesses in the City of St. Louis
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I don't think ESRX could afford Anthem, Cigna or Humana. Anthem and Cigna are entirely out of reach. Humana has a comparable market cap to ESRX and any premium paid by them would make it even more unaffordable and unlikely. More importantly, I think any attempt to by ESRX to buy a large health insurance plan company would be extremely unpopular among its (non-St. Louis based) shareholders.
Chalupas54 wrote:
Mon Dec 04, 2017 6:13 am
Anyone have thoughts on how the CVS/Aetna mega-merger could impact STL? *cough* ExpressScripts?
Express Scripts’ future lies in partnerships and/or M&A as the healthcare industry begins to consolidate by cross-sector integration. Rather than seeing similar companies merge, like when Express Scripts bought another PBM company (Medco) in 2012, we’re likely to see dissimilar companies partner up. The CVS/Aetna deal is the combination of a health insurance company (Aetna) and a retail pharmacy with its own PBM network (CVS). The objective of doing this is to link together customers of both companies to their new integrated platform. Or, we can expect to see Aetna clients begin sourcing their pharmaceuticals on a near-exclusive basis from CVS pharmacies and from CVS’ PBM network.

The CVS/Aetna deal could be the harbinger for wide healthcare industry consolidation. There are financial news stories about health insurance company Humana maybe partnering up with, or being acquired by, Walmart. Lots of people are wondering what Walgreens Boots Alliance is going to do, as they already have retail pharmacies matched with pharmaceutical sourcing (both on a global operating basis) and Alliance Healthcare. And most prominently, Express Scripts’ CEO recently spoke openly about a possible partnership with Amazon while nominally stating their intentions to remain an independently owned company.
dweebe wrote:
Mon Dec 04, 2017 8:25 am
Why am I being a Negative Nancy and guessing that in a few years we'll have empty buildings up by UMSL?
Regarding their NoCo HQ and operations, I certainly don’t see these buildings going vacant. Express Scripts remains the largest player in the Pharmaceutical Benefits Management sector. As well, PBM is an incredibly complicated business that would be hard to create from scratch. Their facilities in North Park include customized large-scale packaging and shipping operations. And, Express Scripts’ integration with UMSL, which started as a strategic partnership to source a better trained workforce, isn’t something that an acquirer can just dump without significant costs and actually operates as a de facto hedge against a corporate relocation by a potential acquirer. It’s not just the current employee base that’d have to be relocated but their pipeline for new talent. Let’s also keep in mind that ESRX is one of the largest companies in the US, ranked the 22nd largest by market cap earlier this year. That’s not an easy target for just anyone to take over.

Meanwhile, financial rumors earlier this year were that Amazon was going to enter PBM themselves, but since then they’ve entered more into health care equipment, with some buzz late today about their interests in dental products. Now, if I was Amazon and was interested in PBM, I’d think it far more reasonable to acquire an existing PBM company rather than trying to reinvent the wheel internally.

Then again, maybe ESRX looks to be the acquirer, maybe for Humana. Note: That's pure speculation.

Either way, look for the lights to stay on at Express Scripts’ campus in NoCo.
arch city wrote:
Mon Dec 04, 2017 12:07 pm
When Express Scripts first merged with MedCo I said somewhere on this forum - years ago - that Express Scripts' next steps should be to look at big health care companies as acquisition targets.

Now we are here.
It certainly looks like the healthcare industry as a whole is about to go through a whole lot of consolidation. It wouldn’t surprise me if ESRX makes a play at Humana, if they can get in front of Walmart. Much of this will have to go to how much ready cash and treasuried stock ESRX has in hand and how much they’d be willing to offer up for such a buy, as well as all other opportunity costs this could involve. As Wabash mentioned above, purchases like these would certainly be expensive. Still, after CVS/Aetna, such deals are more likely to occur.

Disclosure: I have a bullish position in ESRX.
Accession appears to be the bigger of the two so hopefully this plays out well for STL.

“Ascension is in talks with Providence St. Joseph Health about a possible merger that would create the largest owner of U.S. hospitals, the Wall Street Journal reports.

A merger of the two nonprofits would put 191 U.S. hospitals under one operator. The combined organizations would have hospitals in 27 states and annual revenue of $44.8 billion, based on results from the most-recent fiscal year.”

https://www.bizjournals.com/stlouis/new ... j=79318431
Ascension must be the biggest local company nobody has ever heard of. How many employees do they have here anyway?
Not sure on the number of employees working at their main office by the airport, but they have their investment management team on their own in Clayton and I believe it's about 20 +/- people.
I've always known about Ascension. It's always been a large system, but it's grown pretty fast under its current CEO.

I thought Ascension had moved their primary corporate offices to Hanley Corporate Tower in downtown Clayton.

St. Louis has some of the largest hospital systems in the country.

One of the reasons Nashville has grown economically is because a large % of its new economy is healthcare. The Nashville area has many of the country's largest "For Profit" hospital systems. In past years, Nashville has lured away some health care firms from St. Louis.
From a different health merger story but it has Ascension info.

http://www.montrosepress.com/national/n ... 4b47e.html

This past weekend, the Wall Street Journal reported that Seattle-based Providence St. Joseph Health and St. Louis-based Ascension Health were in talks on a possible merger that would create the nation's largest hospital network and lead them to also relocate and open a shared headquarters in Chicago. A merger of Providence and Ascension would account for 191 hospitals in more than half of the states, surpassing the 177 hospitals of industry leader HCA Healthcare. The companies declined comment.
somebody needs to nuke Chicago.

Chicago: ruining everything for every other Midwestern city since trains were invented.
jshank83 wrote:From a different health merger story but it has Ascension info.

http://www.montrosepress.com/national/n ... 4b47e.html

This past weekend, the Wall Street Journal reported that Seattle-based Providence St. Joseph Health and St. Louis-based Ascension Health were in talks on a possible merger that would create the nation's largest hospital network and lead them to also relocate and open a shared headquarters in Chicago. A merger of Providence and Ascension would account for 191 hospitals in more than half of the states, surpassing the 177 hospitals of industry leader HCA Healthcare. The companies declined comment.

Oh come on. You gotta be kidding me. WHY?
That's a really unfortunate. We need companies like Ascension to stick around and grow right here.
Stenger needs to get on this! The County needs to be doing whatever possible to keep them here!

Obviously there is a chance that any relocation would be inevitable if the deal goes through, but at the very least his office should be doing anything possible.
So it sounds like ascension made its decision :cry:
Why on earth are companies still moving to Chicago? Don't they know that the state is totally broke and their employees are all gonna get screwed?
I have just contacted the St Louis Economic Development Partnership as well as County. Everyone should do the same.

But agreed. I see no reason why Chicago is appealing anymore.
Chicago is still a great place for vain executives.

Its not like Ascension is going to employee scores of people there.

Chicago's time is coming. Stagnant since '08 like the rest of the old guard midwestern cities-in both population and economic growth.

Compared to peer cities its not doing well at all.
Oh btw I know this news stings, but take solace in this...

Avg High 12/13-12/21
St. Louis Chicago
50.1 degress 37.25 degrees
BellaVilla wrote:
Wed Dec 13, 2017 11:16 am
Oh btw I know this news stings, but take solace in this...

Avg High 12/13-12/21
St. Louis Chicago
50.1 degress 37.25 degrees
Word on the street though is the HQ will be inside.
This is really disheartening. St. Louis seems to have a pretty robust healthcare and hospital industry and talent pool. I really don't get it. Other than O'Hare airport connections this just seems like a way of increasing costs. Chicago's a great city, but this move and the Clayco move, what's the big hang up on Chi?
Think a lot of it has to do with flight connectivity..
It the merger a done deal?

I have not read anywhere that it is.
DogtownBnR wrote:
Wed Dec 13, 2017 2:30 pm
It the merger a done deal?

I have not read anywhere that it is.
No, it is not. That was just what would happen if it goes through. I don't know how likely it is to go through.
I'm inclined to think the flight connectivity really is something of a big deal. Chicago is the cheapest market in the country for flights, if I recall correctly. And we are one of the more expensive markets. Even when TWA was here, this was a comparatively pricey place to catch a flight. Of course, you could go anywhere easily and corporations doubtless got a nice discount on the expensive seats towards the front, so that probably mitigated some of the problem. Southwest is a dandy airline, but they cannot give the same perks that a legacy carrier can. They just don't have the equipment for it. That right there is a real problem. It's one thing to ask contractors and middle management to fly coach, but I can't imagine any upper management in the world would really be eager about the idea. So there's your options: coach or layovers. This is absolutely not true of Chicago. Or Denver. Or Phoenix. Or Charlotte. Or Dallas. Or Houston. Or Minneapolis. Or Salt Lake. Or even Detroit. You can probably even find cities with comparable or even somewhat inferior route maps that are more appealing to front office sorts, since the route map is American, Delta, or United and not an LCC. Nashville, maybe. Or Indianapolis. I basically enjoyed my first trip on Southwest. But make no mistake, even the "expensive" seats are quite closely equivalent to coach anywhere else. With a couple of free checked bags. And maybe a coupon for a free drink. Guess who wouldn't care about that? It's a real problem.
symphonicpoet wrote:I'm inclined to think the flight connectivity really is something of a big deal. Chicago is the cheapest market in the country for flights, if I recall correctly. And we are one of the more expensive markets. Even when TWA was here, this was a comparatively pricey place to catch a flight. Of course, you could go anywhere easily and corporations doubtless got a nice discount on the expensive seats towards the front, so that probably mitigated some of the problem. Southwest is a dandy airline, but they cannot give the same perks that a legacy carrier can. They just don't have the equipment for it. That right there is a real problem. It's one thing to ask contractors and middle management to fly coach, but I can't imagine any upper management in the world would really be eager about the idea. So there's your options: coach or layovers. This is absolutely not true of Chicago. Or Denver. Or Phoenix. Or Charlotte. Or Dallas. Or Houston. Or Minneapolis. Or Salt Lake. Or even Detroit. You can probably even find cities with comparable or even somewhat inferior route maps that are more appealing to front office sorts, since the route map is American, Delta, or United and not an LCC. Nashville, maybe. Or Indianapolis. I basically enjoyed my first trip on Southwest. But make no mistake, even the "expensive" seats are quite closely equivalent to coach anywhere else. With a couple of free checked bags. And maybe a coupon for a free drink. Guess who wouldn't care about that? It's a real problem.
Ehh, a lot of this is really iffy. Chicago is definitely not the cheapest airfare market. If it is, please tell me how to find their cheap fares. I also don’t find St Louis to be expensive. Fares out of STL, as someone who has flown into STL from literally every possible origin, are cheaper than most places. I think as other people have said, it’s just the “Chicago” name, IMO. I think that brand is fading quickly, however. Keep in mind that unless you are a hub city, you won’t have nonstops everywhere. Austin, Indianapolis, Nashville, and many many others have gaping holes in their route maps. Not really the case here in St Louis anymore. After the additions of San Jose and Sacramento, STL has a complete domestic route map.

On your point about Southwest, I know of many blue chips that have contracts/buy seats with Southwest. They aren’t as cheap as they used to be, but the advantages they offer domestic business travelers is really substantial. I don’t know why everyone says they’re a terrible airline. STL has biz seats to all major business markets. For STL-NYC alone we have 4 airlines running it.

But, in general, STL is very well served by legacy carriers. They all offer competitive prices. I just get very confused where people are ~still~ saying we have poor air service. That’s literally not the case.


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The Business Journal had a follow up article out this morning on the merger. There was mention that a letter of intent to merge was signed in August but no mention where the combined company would be hq'd.
Chalupas54 wrote:
Thu Dec 14, 2017 5:27 am
Ehh, a lot of this is really iffy. Chicago is definitely not the cheapest airfare market. If it is, please tell me how to find their cheap fares.
Check Southwest's prices out of Midway?

NB: This is a joke. In the author's very limited but statistically irrelevant experience Southwest flights from Midway are anywhere from 25-50% cheaper than comparable flights from Lambert. However, 2016 DOT statistics appear to back this up, as they rank Midway as the lowest average fair of fifty nine major airports.

I'm getting this from an article that was posted recently on Airliners.net. To quote Eno Transportation Weekly "Finally, Midway has the lowest average fare of any airport in the country." Which was a substantial part of why they ranked Chicago first in air service. Now, you can dispute their methodology, if you wish, but it's all there in the fine print. Better yet, their data is available for download, so you can see how they came to their conclusions.
I also don’t find St Louis to be expensive. Fares out of STL, as someone who has flown into STL from literally every possible origin, are cheaper than most places.
In the same report Lambert is ranked fiftieth of fifty nine. The DOT data on which this table is based is quite public, but I warn you, it is massive, as it's in city pairs, not cities. So I haven't waded through terribly much of it.
On your point about Southwest, I know of many blue chips that have contracts/buy seats with Southwest. They aren’t as cheap as they used to be, but the advantages they offer domestic business travelers is really substantial. I don’t know why everyone says they’re a terrible airline. STL has biz seats to all major business markets. For STL-NYC alone we have 4 airlines running it.
I'm not really disputing that many or even most companies use Southwest. It's not about that. It's about whether the upper management wants to fly in the cattle car. And I'm going out on a limb here . . . they don't. Nor would I suggest that other non-hub cities have better route maps than we do. But it's not all about the route map. It's also about the quality of that service. And it's not middle management or contractors that decides where the HQ goes, and not every company has a private jet. (And even if they do, not everyone in upper management will have the keys.) So whether or not a company is willing to book employees on a given airline is almost irrelevant. The boss doesn't want to fly coach. Or suffer layovers. And there are only three airlines in the country that actually offer real bone-fide business seats nationally. Southwest has something they call "business class" . . . but it's not remotely the same thing as what you'd get on the legacy carriers. It's the same teeny tiny seats you get in the back of the plane everywhere else. Sure, you get to pick a window seat by virtue of getting on first. And you get a free drink. But there's not much you can do to keep me from sitting down next to you. And as you get off, does it look to you like the seats at the front of the plane when you walk off one of American's triple sevens? Be honest.

I don't think Southwest's service is in any way bad. Their customer service was great. The planes are clean. The crew was friendly. But really, it's pretty much the same as flying coach on any airline, save for the fact that you get a couple of free checked bags domestic. All that said, I'm really glad their here and I hope they expand. They're a perfectly good carrier. But . . . I do think the airline service issue is real. And after some careful analysis, I can see why Southwest probably doesn't fill the gap for a "suit." Doesn't mean they're bad. Just means they really are different, and that difference is non-trivial. Not everyone wants the iconoclast.

All of which is to say that we should maybe find a way to encourage American to expand their service a little as well. Or start a new "legacy" airline. I'm pretty confident we're still a bit underserved. It's been a vicious cycle with the dominant legacy carrier supplying fancy service and the major companies that demand that service both bailing at the same time and opening a drain at the bottom of the air service pool. The leak has been plugged . . . but it's going to take some time for the pool to fill back up. Mm. maybe another ten to fifteen years, at a guess. I have patience. We live in interesting times. (Sadly?)