Sprinkled holy water on company documents and desks
Electronic prescription service sold
Buyout nets owners $1.5M
By James McNair
The Cincinnati Enquirer
PocketScript, the Mason company that launched a wireless drug prescription service for doctors - and sprinkled holy water on its financial documents when it ran low on capital - has sold its assets to a Texas company whose investors include Microsoft chairman Bill Gates and former General Electric CEO Jack Welch.
The transaction was announced last week by Zix Corp. of Dallas. Zix makes computer programs that protect users from electronic viruses, spam and online invasion. It was founded in 1999 as ZixIt by entrepreneur David P. Cook, who persuaded Gates, Welch and billionaire industrialists Michael Dell and H. Wayne Huizenga into buying ownership stakes.
For PocketScript, also born in 1999, ZixCorp was at least its fifth suitor in two years.
Owned by co-founders Steve Burns and Dr. Ted Bort and several venture capitalists, PocketScript began entertaining offers after the market for venture capital and initial public stock offerings dried up. It turned down a $13.5 million buyout offer from Cincinnatian Rob Reinders in January 2001. A proposed sale to Medix Resources of New York fizzled in March.
ZixCorp said it paid $1.5 million, including 362,903 ZixCorp shares valued at $1.35 million, for PocketScript's assets. ZixCorp CEO John Ryan noted that PocketScript is one of the more established players in the e-prescription industry.
"The demand for e-prescribing is being driven by the healthcare industry's need to increase patient safety, reduce costs and save time for both pharmacists and prescribers," Ryan said. "When you consider the increasing volumes of prescriptions written in this country and multiply that by a transaction and subscription fee, the potential for the e-prescribing market is huge."
PocketScript's Point-of-Care system operates on both Blackberry and PC platforms and allows doctors to write drug prescriptions remotely while checking drug-to-drug interactions and patient drug-use histories. As of March, Point-of-Care was used by about 600 doctors. Last week, ZixCorp said it the service will be offered to the 18,000-plus doctors affiliated with the Tufts Health Plan in Boston.
Burns joined ZixCorp as a vice president and general manager of its PocketScript Division.
"We saw this marriage as a perfect fit," Burns said of the merger. "PocketScript's assets will enable ZixCorp to extend its leadership position in the health-care sector."
PocketScript filed for and emerged from bankruptcy in 2002. Among the debts discharged were back salaries and bonuses owed to former employees and vendors.
Having been laid off after working months without a paycheck in early 2001, employees questioned the company's infusion of prayer and religious icons in the workplace. In December 2000, after visiting the Virgin Mary apparition in Medjugorje, Croatia, Burns handed out rosaries to employees and Bort sprinkled holy water on company documents and desks.