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- Cigna on Thursday announced a $67 billion takeover of Express Scripts.
- The banks that worked on the deal are expected to earn as much as $200 million.
- The healthcare deals wave has produced as much as $500 million in fees for banks this year.
The healthcare consolidation wave continues.
On Thursday, health insurer Cigna announced a $67 billion takeover of Express Scripts, a pharmacy benefit manager that helps negotiate lower prices for prescription drugs in the form of rebates on behalf of health plans.
The deal for Express Scripts, the last standalone of the three massive PBMs, includes $52 billion in cash and stock and $15 billion in assumption of debt.
Investment bankers will add to a growing pile of fees in 2018 stemming from the industry’s mergers-and-acquisitions boom.
The bankers running the massive tie-up could earn as much as $200 million for advising on the deal, according to Jeffrey Nassof, director of the consulting firm Freeman & Co.
Morgan Stanley was the sole adviser to Cigna and is expected to pull in between $80 million and $100 million in deal fees, according to Nassof.
Boutique Centerview Partners and independent Lazard advised Express Scripts, and they’re expected to split fees of $80 million to $100 million.
That brings the total fees from healthcare deals in 2018 – which include Sanofi’s $11.6 billion buyout of Bioverativ and Celgene’s $9 billion acquisition of Juno Therapeutics – to as much as $500 million, assuming the deals close, according to Nassof.
The total at this point in 2016 and 2017 was $350 million.