Acquisition of Axia by Healthways, Inc

Abstract

Appropriate for use in business policy and strategy courses. The vice president of integration of Healthways reviews the value-driver-scorecard template to be used in managing the integration efforts of the company's most recent acquisition, Axia Health Management LLC in December 2006. He must ensure a seamless integration of Axia and its five distinct business units spread across the United States. Before his arrival, the decision was made to delay integrating the company until the end of 2007. Midway to that goal, it was clear that some parts of the company should be integrated early. He now has to determine what part of the original plan to accelerate and what can wait. Excerpt UVA-BP-0537 Rev. Dec. 18, 2014 ACQUISITION OF AXIA BY HEALTHWAYS, INC. Justin Smith, vice president of corporate development at Healthways, Inc., had just sat down with Marie Santiago, chief executive of Statewide Insurance, in her Memphis, Tennessee office. It was May 2007, and he was trying to formulate a response to her question about how the recent acquisition of Healthways would add value to her health insurance company. Smith had joined the company shortly before the Axia Health Management (Axia) deal closed in December 2006 and was now charged with ensuring a seamless integration of Axia and its five distinct business units. The Merger Logic: From Disease Management to Whole-Health Services Healthways was a disease management company of nurses, doctors, and other experts organized around customer segments with specific diseases such as diabetes. It was essentially a telephonic advisory business with 11 call centers. Axia was an assembly of five wellness companies operating independently in five different locations. Four of Axia's five companies had been acquired in the previous 12 months and had little operational synergy beyond basic back-office functions. The Axia companies focused on fitness programs, website development, management of provider networks, and general health coaching, and had few, if any, clinical people (nurses and doctors). . . .