Another name-brand company has purchased a Birmingham startup.
Homegrown startup Pack Health has been acquired for an undisclosed amount by New Jersey-based Quest Diagnostics Inc. (NYSE: DGX), and it's a deal that has been in the works for several months.
Pack Health CEO Mazi Rasulnia said the company chose Quest because they share a common goal, providing care for people with chronic diseases, and because Rasulnia thinks the deal creates value for the organization. The relationship between the two companies is a good one, he said.
"There are a lot of different ecosystems in health care, and it really allows for Pack Health to scale pretty quickly across all of those ecosystems,” Rasulnia said. "They're highly regarded as an employer, so that that was the top of the list. The aim that they have is to really help us grow, and the idea of this deal is all about growth and new capabilities for the future. So it made it made a lot of sense for us to join forces with them.”
From Quest's perspective, the deal builds on its 2018 acquisition of MedXM, now Quest HealthConnect, which provides in-person, home-based risk assessment and monitoring services that supplement clinical care.
Rasulnia said the deal helps his company close care gaps and improve health outcomes at lower costs. He also said the platform that Pack Health offers can go to market across some of Quest’s other services, giving Pack Health a wider reach.
As far as any changes in Pack Health’s infrastructure, Rasulnia said it will be business as usual, as they plan to remain in Birmingham and retain all employees and titles.
Another name-brand acquisition of a Birmingham company — Target Corp.'s (NYSE: TGT) acquisition of Shipt at the end of 2017 — opened the door for other, similar agreements, giving more companies in Birmingham a chance to score major deals, Rasulnia said.
“I view Birmingham as not only a great place to start a business, but especially a health care business, given UAB's presence here in the city. And I think what this means to bring a major … company down to Birmingham, and continue to operate in Birmingham, is really going to set the stage for additional investors to look at Birmingham startups, not just the local investors but outside capital,” he said. “My hope is that local investors will continue to take some additional risks in support supporting startups in the ecosystem, and then hopefully the business community will also look at startups as a mechanism to generate great economic development opportunities and jobs.”
Pack Health declined to disclose the purchase price for the deal.
Birmingham has seen other recent cases in which an outside company acquired an organization in the city. For example, Atlanta-based White Cap Supply Holdings LLC reached a deal to acquire Ram Tool Construction Supply Co. in early December for an undisclosed price. Earlier in the year, Paris-based Rexel Group’s U.S. arm, Rexel USA, reached an agreement to acquire Birmingham-based Mayer Electric Supply Co. in a deal with an enterprise value at $456 million.
In a third deal, U.S. Orthopaedic Partners acquired Birmingham-based Andrews Sports Medicine & Orthopaedic Center.
