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Caremark Cuts Deal With Medpartners

Wed., May 15, 1996

MedPartners/Mullikin Inc. said it will acquire Caremark International Inc. in a transaction valued at $2.5 billion, creating the largest U.S. manager of doctors’ groups.

This is the fourth acquisition announced this year by MedPartners, a leader in a business which allows doctors to consolidate practices in sophisticated companies which handle back-office chores and contract negotiations.

Caremark, spun off in 1992 by Baxter International Inc., has expanded, too.

It was hobbled, however, by a federal investigation and $216 million in settlements for alleged kickbacks to doctors for referrals to a home health-care unit since sold.

“This is a very positive move for Caremark shareholders,” said Jack McGowan, a portfolio manager with Clover Capital Management.

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