Known as one of the most a good fortune turnaround CEOs and M&A (mergers and acquisitions) pros throughout the healthcare business, Edwin “Mac” Crawford spent the principle 15 years of his profession (1971 to 1986) throughout the financial and industry sectors in a series of certified public accountant (CPA), chief financial officer (CFO), and President roles.
Crawford’s legendary profession in healthcare began in 1990, when he was once as soon as recruited to turn spherical Charter Medical, a struggling owner and operator of psychiatric hospitals. Over the method his seven-year tenure, he made over Charter from a bankrupt challenge into crucial behavioral smartly being services company throughout the U.S.
Crawford is continuously known as the Chair and CEO who made over MedPartners from a seriously mismanaged company with huge running losses into Caremark Rx, one of the vital essential biggest prescription benefits keep watch over (PBM) and mail-order pharmaceutical companies throughout the U.S.—and then orchestrated the $26.5-billion merger with CVS in a deal that created CVS Caremark, a $75-billion Fortune 20 company.
Since he stepped down as Chair of CVS Caremark in 2007, Crawford has served as Elementary of CrawfordSpalding, an investment banking advisory corporate interested in turning spherical distressed corporations. He has moreover partnered with JANA Partners, an activist hedge fund, on investments in underperforming healthcare companies.
Key Takeaways
- Edwin “Mac” Crawford is known as one of the most a good fortune turnaround CEOs and M&A pros throughout the healthcare business.
- In his first serve as throughout the healthcare sector, Crawford made over Charter Medical, a bankrupt owner and operator of psychiatric hospitals, into crucial behavioral smartly being services company throughout the U.S.—and he did it inside of of 7 years.
- Crawford is also identified for remodeling MedPartners, a mismanaged company with huge running losses, into Caremark Rx, a primary PBM and mail-order pharmaceutical company—and then orchestrating the $26.5-billion sale to CVS in a deal that created CVS Caremark, a $75-billion Fortune 20 company.
Investopedia / Alison Czinkota
Coaching and Early Occupation
Edwin “Mac” Crawford (born 1949) earned a B.S. in Accounting from Auburn Faculty in Alabama (1971), qualified as an authorized public accountant (CPA), and joined Arthur More youthful (a predecessor company to Massive 4 accounting corporate, Ernst & More youthful), where he spent 10 years (1971 to 1981) honing his business and monetary keep watch over talents.
After leaving Arthur More youthful, Crawford spent 5 years in Chief Financial Officer (CFO) roles, at an accounting corporate (GTI, 1981 to 1985) and an Alabama-based instrument manufacturer (Oxylance Corporate, 1985 to 1986).
In 1986, Crawford was once as soon as recruited as President of Mulberry Facet street Investment Company in Georgia, where he spent 4 years managing the corporate’s exact assets, O&G (oil and gas), and undertaking capital investments.
Charter Medical and Magellan Neatly being (1990 to 1997)
Crawford’s legendary profession throughout the healthcare sector began in 1990, when he was once as soon as recruited as Government Vice President of Well being facility Operations at Charter Medical Corporate, a Georgia-based company that owned over 100 psychiatric and acute-care hospitals all through the U.S. and Europe. Over the method his seven-year tenure, he made over Charter from a struggling owner and operator of psychiatric hospitals to crucial behavioral smartly being services company throughout the U.S.
When Crawford joined in 1990, Charter was once as soon as going thru bankruptcy as a result of critical financial, legal, and control issues, ranging from allegations of Medicare and Medicaid fraud to a lawsuit claiming that the employee stock ownership plan (ESOP) had overpaid for 11.8 million Charter shares purchased from Chair and CEO William Fickling and his members of the family. On best of this, without reference to the onslaught of outstanding fee controls the well being facility business was once as soon as going thru from managed care throughout the early 1990s, CEO Fickling had persevered to pour money into unprofitable inpatient facilities—accruing even higher losses.
Despite the fact that he was once as soon as a healthcare novice in 1990, Crawford was once as soon as praised thru every business insiders and analysts for the way in which abruptly he advanced and carried out a cross-enterprise methodology at Charter to rein in operational costs and realign the business. With an urgent mandate to restructure the company, Crawford in short came upon that—for the reason that business shifted to managed care and psychiatric and acute-care victims have been pushed out of inpatient facilities into less expensive tactics—Charter sought after an entirely new sort to send cost-effective behavioral healthcare throughout the emerging outpatient and home-based healthcare market. After major Charter by way of Chapter 11 bankruptcy and a large restructuring, Crawford was once as soon as promoted to President and Chief Operating Officer (COO) in 1992. In March of 1993, he modified William Fickling as Chair and Chief Government Officer (CEO).
As soon as Crawford took over as CEO, he began selling off acute-care facilities and psychiatric hospitals, ramping up Charter’s outpatient and home-care services, and lining up partnerships with large healthcare tactics to keep watch over their behavioral smartly being services. In 1995, Crawford led the acquisition of unquestionably one among Charter’s competition in behavioral smartly being services, Florida-based Magellan Neatly being Services. After divesting Magellan’s psychiatric in-patient business to legendary dealmaker Richard Rainwater’s Crescent Precise Belongings Equities, he used the proceeds to erase Charter’s final cash owed. With Charter’s financial slate cleaned, the mixed company was once as soon as renamed Magellan Neatly being Services in October of 1995, with Crawford as Chair, CEO, and President.
Over the next two years, the sale of the former Magellan psychiatric hospitals funded the acquisitions of various small pageant, along side Green Spring Neatly being Services (1995) and Aetna’s Behavioral Neatly being Unit (1997), making Magellan crucial managed care company in U.S. behavioral smartly being thru 1997.
MedPartners and Caremark Rx (1998 to 2007)
In line with his a good fortune turnaround of Charter-Magellan, Crawford was once as soon as recruited in March 1998 as Chair and CEO of MedPartners, a doctor practice keep watch over (PPM) business that had imploded 3 months earlier, when large running losses of $840 million from its Western U.S. operations and debt tasks in far more than $1.8 billion have been reported.
A former Wall Facet street favorite, MedPartners’ fortunes had plunged in early 1998, when the due diligence staff of PhyCor, a conceivable merger partner throughout the PPM area, had uncovered that the “merger and restructuring reserves had been drained to hit earnings numbers.” The PhyCor staff moreover described “frightening” mismanagement in MedPartners’ California corporations, along side tactics “in chaos,” “inadequate” reserves to cover incoming bills, and “thousands of unpaid claims.” What was once as soon as possibly most alarming to PhyCor (and Wall Facet street) was once as soon as that “MedPartners’ senior keep watch over didn’t know the way broken the company was once as soon as.”
In January of 1998, 3 months quicker than Crawford was once as soon as presented in, PhyCor terminated the merger, and MedPartners presented every a restructuring value of $115 million in California and longer term source of revenue far wanting expectations. Just about right away, the stock plunged 45%, and the CEO, Larry Ray Area, was once as soon as fired. When Crawford were given right here in, the entire extent of the huge running losses began to ground. The California business was once as soon as “losing $200 million a year” and “lawsuits from shareholders and physicians began to pile up.”
Faced with turning spherical a internet loss of $821 million at year-end 1997, Crawford presented his function to dump MedPartners’ whole PPM operation inside of of three years and refocus the company on one profitable division with large cash flows: a $2.4-billion prescription benefit keep watch over (PBM) division which were were given as part of MedPartners’ 1996 acquisition of Caremark.
Against this to the PPM business, prescription benefit keep watch over (PBM) corporations like Caremark function as intermediaries that negotiate discounts with pharmaceutical companies on behalf of employers and insurers—and Crawford right away spotted the opportunity of PBMs throughout the risky, cost-cutting healthcare market of the past due 1990s. To duplicate this enterprise-wide shift to PBMs, MedPartners was once as soon as renamed Caremark Rx, and Crawford spent the next twelve months selling off just about all of the U.S. physician practices, which involved dropping various thousand staff.
Over the next six years, Crawford made over a mismanaged company that was once as soon as hemorrhaging cash into one of the vital essential biggest PBM and mail-order pharmaceutical companies throughout the U.S. Underneath his control, Caremark Rx revenues grew from $2.4 billion in 1998 to $9 billion in 2003. With just about all debt paid off thru 2004, the company was once as soon as in a position to acquire a PBM rival, AdvancePCS—a merger that made Caremark Rx crucial PBM company throughout the U.S., with annual revenues of over $23 billion.
CVS Caremark (2007)
In 2007, Crawford orchestrated the $26.5-billion sale of Caremark Rx to drugstore chain CVS in an all-stock deal that created a Fortune 20 company with annual source of revenue estimated at $75 billion. Referred to as a “merger of equals,” the deal mixed Caremark’s pharmacy benefits keep watch over services with crucial U.S. pharmacy chain into a brand spanking new company, CVS Caremark. Following the merger, Crawford was once as soon as named Chair of CVS Caremark on the other hand retired from the Board later that twelve months.
CrawfordSpalding Personnel (Since 2008)
In 2008, Crawford presented CrawfordSpalding Personnel, an investment banking advisory corporate interested in turning spherical distressed corporations. Together with offering strategic, keep watch over, and monetary services based, CrawfordSpalding invests in positive struggling client companies. His co-founders throughout the new advisory corporate have been two ex-CVS Caremark executives, Bill Spalding, the former Government Vice President of Methodology, and his son Drew Crawford, the former Senior Vice President of Underwriting and Analytics.
JANA Partners and WL Ross & Co. LLC
Since his retirement from CVS Caremark, Crawford has worked on various healthcare investments with JANA Partners, an activist hedge fund founded thru Barry Rosenstein in 2001. As an business veteran and turnaround specialist, Crawford has essential credibility as a shareholder activist, i.e., an investor who buys crucial stake in a public company and can get a seat on the board of directors to influence how the company is run—continuously on account of they imagine that the company is mismanaged from a financial or control point of view. If the board resists the proposed changes, the activist can use various offensive tactics to force business, e.g., media campaigns, lawsuits, or proxy fights: persuading other shareholders so they may be able to use their proxy votes towards the board.
Operating with JANA, Crawford’s participation has ranged from taking seats on the Boards of Labcorp (a systematic laboratory group) and Group of workers Neatly being Holdings (a doctor services team) to serving on the search committee for the CEO of Group of workers Neatly being. As JANA’s partner, Crawford has moreover exerted additional assertive drive on boards. As an example, in 2021, when Alabama-based Encompass Neatly being, a $6.4-billion group of inpatient and outpatient hospitals, was once as soon as planning to spin off the home smartly being and hospice unit, Crawford partnered with JANA to push the company to pursue a merger instead. Every Crawford and JANA Partners have invested in Encompass (JANA owns more than 2%), and Reuters reported in December 2021 that Crawford “signaled privately that he would be ready to join the Encompass Board, if necessary, as part of a dissident slate (of directors).”
Post CVS Caremark, Crawford has moreover partnered with Wilbur Ross, a billionaire investor who spent 25 years as a bankruptcy restructuring information for Rothschild Investments. In 2010, Crawford and Ross presented the discharge of Crawford-Ross, a joint venture to co-invest in and restructure healthcare companies. Together with bringing up that his company was once as soon as “in a position to speculate more than $1 billion to beef up Mac and his staff as we jointly assemble a large position in healthcare,” Ross said that “given his practice file in successfully restructuring and dealing healthcare corporations, (Crawford) is the chief best possible positioned to look out and capitalize on possible choices created throughout the turmoil resulted in throughout the sizzling healthcare legislation.”
What Does Crawford Consider the Most Treasured Commodity in a Restructuring?
In a 2004 article in The Tennessean, Crawford cited the fact that Caremark’s PBM business generated large amounts of cash as the reason he recognized that business as the one with the very best growth doable. Any time you may well be doing a restructuring, you wish to have cash glide. Cash is a valuable commodity.”
What Awards Has Crawford Received?
In line with his impressive practice file of saving floundering companies and returning them to profitability, Institutional Investor named Crawford the Top-Appearing CEO in Healthcare Generation and Distribution for three right away years:Â 2005, 2006, and 2007.
What Are Crawford’s Charitable Causes?
In 2008, Crawford established The Crawford Family Deanship at Washington and Lee Faculty in Virginia to beef up “competitive salaries” for the Dean and College throughout the Williams Faculty of Industry, Economics, and Politics.
The Bottom Line
When Crawford was once as soon as recruited to restructure Charter Medical, he was once as soon as a whole healthcare novice—and every business insiders and analysts have been impressed with how abruptly he known a shift in business name for that can make PBMs high-growth corporations throughout the cost-cutting healthcare market of the past due 1990s.
When the CVS-Caremark merger that Crawford orchestrated was once as soon as presented in 2006, The Wall Facet street Mag predicted that the new “behemoth” would keep an eye on “the dispensing of one billion prescriptions a year—more than a quarter of the U.S. total.” By the use of 2012, the CVS Caremark share of retail prescriptions stuffed throughout the U.S. was once as soon as 17.25%; thru 2021, that share was once as soon as 38.55%.
Discussing his methodology for CrawfordSpalding with The New York Events throughout the leveraged buyout market in 2008, Crawford anticipated having the ability to benefit from the turmoil. “I’m at my best in a messy situation.”
