Caremark Savior Forms Distressed Advisory

The man behind the massive turnaround and enormously lucrative sale of pharmacy benefits manager Caremark to drug store chain CVS plans to impart his restructuring wisdom to buyout firms. Mac Crawford, Caremark’s former CEO and chairman, earlier this month launched an advisory and management services firm, CrawfordSpalding Group, focused on rehabilitating distressed companies.

The new firm considered raising a buyout fund of its own but concluded that deal-making and fundraising would distract from CrawfordSpalding’s focus of fixing ailing companies. As an adviser, the firm can take on more situations at once, Crawford said. Still, the firm might consider raising a special-purpose acquisition company if the slew of SPACs that recently hit the market prove successful, he said.

Joining Crawford are two former colleagues, Bill Spalding and Drew Crawford, who served, respectively, as CVS Caremark’s executive vice president of strategy and managed care, and senior vice president of underwriting and analytics.

Based in Nashville, the new firm plans to cater to distressed businesses as well as businesses on the verge of distress. With a recession taking hold and the possibility of refinancing debt limited, the new group believes its entry to the market is timely, according to Mac Crawford. “Companies that find themselves over-levered may also find a tighter debt payment environment than we’ve seen in the past,” he said.

That’s where CrawfordSpalding intends to step in with restructuring and strategy advice. The firm doesn’t plan to limit its offerings to simply providing advice; CrawfordSpalding’s principals are prepared to parachute in to serve as interim managers for distressed companies in need of leadership. In situations where the company is so distressed it can’t afford to pay advisory fees, the firm would even accept a slice of equity as payment for service, Crawford said.

At the helm of Caremark for nine years, Crawford slashed the company’s $1.8 billion in debt and more than quadrupled its revenues through acquisitions. In 2007, he engineered the $26.5 billion sale of Caremark to drug-store chain CVS and left the combined company shortly thereafter.

Despite CrawfordSpalding’s background in the medical industry, the firm doesn’t plan to limit its services to that sector. Before joining Caremark, Crawford worked in real estate and other industries. Likewise, Spalding previously advised distressed companies across all sectors as an attorney with law firm King & Spalding.