SinfoniaRx, a startup spun out in 2013 – acquired for $131 Million or 4.85x revenue

On September 6, 2017 it was announced that New Jersey-based Tabula Rasa Healthcare, Inc. (NasdaqGM:TRHC), a public healthcare company that provides individualized, data-driven technology solutions, acquired 100% stock of Tuscon-based SinfoníaRx, Inc. in a deal worth $131.0 million. The deal consist of $35.0 million in cash, $11.6 million in form of Tabula Rasa’s shares (520,833 shares), and an additional $85.0 million to be paid as earn-out (based on 2017 and 2018 adjusted EBITDA performance). Earnout will be paid in 50% cash and 50% Tabula Rasa’s shares

With about $27.1 million revenue and $3.0 million of adjusted EBITDA in 2016, Sinfonia was acquired for 4.85 revenue multiple or 43.33 adjusted EBITDA multiple in cash, stock and earn-out, if Sinfonia achieves all of its milestones. For 2017, Sinfonia is expected to produce $31.0 million in revenue and $4.5 million in adjusted EBITDA.

Sinfonia, originally established in 2006 and spun out from University of Arizona in 2013 to develop solutions for large volume players, pioneered modern medication therapy management, or MTM, technology and services for Medicare, Medicaid, and Commercial Health plans. Polypharmacy, or the use of five or more prescription drugs, has increased over the years and Sinfonia established the Medication Management Center to mitigate the increased risk of potentially negative drug interactions using scalable technology platform.

Since 2013, Sinfonia grew 300% in three years with a staff of approximately 600 pharmacists, pharmacy interns and pharmacy technicians, working in four nationwide clinical call-centers, completed over 250,000 Comprehensive Medication Reviews and resolved 1.2 million drug therapy problems in2016. Sinfonía went from 2 millions patients in 2013 to now serving 50 million patients nationwide.

To fund the cash portion of the transaction, Tabula Rasa entered into a revolving credit facility agreement of $40.0 million with Western Alliance bank  and other financial institutions.

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