“Jerry Hodge is still the largest individual shareholder, still (Maxor) chairman of the board,” Ward said. “It’s his company and he will continue to run it.”
A private equity firm in Chicago that manages more than $1 billion in investor money has taken a stake in Amarillo-based Maxor National Pharmacy Services Corp.
The infusion from Beecken Petty O’Keefe & Co. will provide Maxor the capital to cash out some investors and grow its business, but it will cause no change in Maxor’s management or location of its corporate headquarters, CEO John Ward said Friday.
“Jerry Hodge is still the largest individual shareholder, still (Maxor) chairman of the board,” Ward said. “It’s his company and he will continue to run it.”
Ward remains CEO, and key management and employees are staying in place, he said.
Maxor is a private integrated pharmacy services company that has nearly 500 employees, most in Amarillo. Ward said Maxor also manages pharmacy employees on a contract basis for clients, bringing its workforce up to several thousand.
Maxor began in 1926 as a single pharmacy in Amarillo, with offices in the Fisk Building — which now is the Courtyard By Marriott at the Historic Fisk downtown — according to Maxor and Bloomberg BusinessWeek. The company’s name comes from founders Howard Guy Maxfield and Samuel Orr, the Maxor website said.
Ward said Hodge was the company’s single owner and sole employee when he bought the company in 1966.
Ward said Maxor sought recapitalization because Hodge and other longtime shareholders wanted to cash out part or all of their investments.
“So this company (BPOC) is simply a passive investor,” Ward said.
“In essence, they’re a bank buying out some of the shareholders and providing equity so we can grow.”
Maxor posted about $30 million in earnings before interest, taxes, depreciation and amortization in 2012, according to a July 8 Dow Jones & Co. article.
Ward would not confirm the figure, but said “that’s probably low.”
Ward said Hodge bought Maxor using a $21,000 loan, “so, if that (Dow Jones) report is true, that’s a good return on your investment.”
Maxor does business in all 50 states and manages pharmacies in more than 30 states. It also manages pharmacy companies, health plans, medical benefit plans and pharmacies at correctional institutions, Ward said.
The company hired Harris Williams & Co., a Richmond, Va., midmarket investment bank, to help attract private equity, Ward said.
BPOC, founded in 1996, invests in company buyouts, recapitalizations and growth opportunities in the health care industry.
Since its inception, the company has raised more than $1 billion to invest in three private equity funds and third-party co-investors, according to its website, bpoc.com.
BPOC principals manage Healthcare Equity Partners, a $150 million investment fund raised in 1997; Beecken Petty O’Keefe & Company Fund II, a $325 million investment fund raised in 2005; Beecken Petty O’Keefe & Company Fund III, a $400 million investment fund raised in 2010; and Beecken Petty O’Keefe IV, a $500 million investment fund raised in 2013, according to its website.
Hodge said keeping Maxor intact and in Amarillo was key in the deal.
“We had lots of opportunities to break the company up, and we didn’t want to do that,” he said.
Proceeds from the investment will soon be reaching shareholders who are selling their shares, he said.
“Money was wired today, so some shareholders will receive proceeds either today or Monday and others, like Mr. Hodge and myself, will still be owners on Monday,” Ward said.
Hodge “didn’t cash out a huge amount, but he took care of estate planning for his family, and I think other shareholders did the same,” Ward said. “At the end of the day, the company remains intact and everybody accomplishes their objectives and the company becomes stronger.”
Ward said Maxor executives anticipate growing the company’s pharmacy benefit management business, for whom there are some Amarillo clients but most come from the East Coast.
“There are a number of other PBMs (pharmacy benefit management businesses) that are small- to middle-market PBMs like us; that’s what we’re going to go after,” he said.
Maxor also is a third-party administrator of pharmacy benefit plans and expects acquisition opportunities in that segment, Ward said.
“We have the second-largest correctional pharmacy in the country that’s located in Nashville, and we’re going to be acquiring other correctional pharmacies across the country to make us No. 1,” he said. “And we have a large pharmacy management business where we manage outpatient pharmacies for health care systems.
“We think we probably are the largest in that space, but we’re going to look to acquire others so we’re the giant in that space.”
