Transaction Case Studies
Dual-Track Engagement leading to $150M Acquisition of vitaCare Prescription Services
Situation Assessment
- TherapeuticsMD is a publicly-traded commercial-stage pharmaceuticals company that is exclusively focused on providing therapeutic solutions for Women’s Health, including family planning, reproductive health, and menopause management.
- vitaCare Prescription Services is a tech-enabled prescription fulfillment platform developed by TherapeuticsMD as a solution to provide patients with transparent, cost-effective access to medications and drive higher adherence to the patient’s prescribed treatment.
TherapeuticsMD had previously tried to run a financing process for vitaCare with another investment bank in 2020, but the deal failed. - In September 2021, TherapeuticsMD engaged Locust Walk to run an $80M financing process for the spin-out of vitaCare, including $30M for the issuance of primary shares and $50M for the sale of secondary shares. Proceeds from the secondary shares would be used to help pay down and restructure TherapeuticsMD’s outstanding debt.
- Following interest from Strategic Investors, Locust Walk launched a full-scale dual-track process and also began conducting outreach to Strategic Partners.
Key Activities
- Prepared compelling marketing materials for both investors and strategic partners.
- Conducted outreach to over 120 Health-Tech-focused VCs, Private Equity Firms, Hedge Funds, and Strategic Partners.
- Encouraged and carefully managed investors through the NDA process prior to holding introductory meeting with vitaCare’s management team, due to TherapeuticsMD being a publicly-traded company with MNPI.
- Managed extensive diligence process across Business Operations, Finance & Accounting, Legal & Regulatory, and Information Technology.
- Performed robust valuation analysis which set proper expectations and provided strong guidance for negotiations.
- Negotiated highly favorable deal terms, resulting in 25% more cash upfront ($150M) than proposed in the initial bid ($120M).
- Locust Walk guided the TherapeuticsMD and vitaCare teams through GoodRx’s diligence process and deal documentation within 34 days of signing the Letter of Intent.
Successful Outcome
- vitaCare Prescription Services was successfully acquired by GoodRx in April 2022 for $150M upfront and up to an additional $7M in earnout consideration.
- The monetization of vitaCare allowed TherapeuticsMD to significantly deleverage the company.
- TherapeuticMD’s stock price rose 90% within the first two days following the announcement.
- GoodRx’s strategic acquisition of vitaCare bolsters its pharmacy manufacturing solutions business, its fastest growing business segment.
- At the time of the deal, GoodRx’s acquisition of vitaCare was their largest transaction to date.
