Week of June 2, 2003
from Site Selection's exclusive New Plant database
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'Medicine City' Statusby JACK LYNE, Site Selection Executive Editor of Interactive Publishing NASHVILLE, Tenn. Music City is also Medicine City: That was a recurrent chord in the rationale that Caremark RX (www.caremark.com) cited in explained why it's relocating its headquarters to Nashville, Tenn. (www.nashvilleareainfo.com).
Spurs Caremark's HQ
Move to Nashville
"Nashville is widely recognized as a center of excellence for the health-care industry, and it will offer our company and employees a high quality of life and a healthy business environment," Caremark Chairman and CEO Edwin "Mac" Crawford said in Nashville while announcing the relocation from Birmingham, Ala. "As home to over 60,000 health-care professionals and 18 publicly traded health-care companies, Nashville is a convenient and established setting for analysts and professionals who follow our sector."
Nashville's fabled music sector may generate the lion's share of Middle Tennessee's publicity. The city's health-care cluster, however, packs pharmaceutical-grade economic punch. Nashville's 18 publicly traded health-care companies last year generated revenues of $28 billion, according to the Nashville Health Care Council (www.healthcarecouncil.com).
Overnight, though, Caremark's arrival will boost the total revenues of Nashville's publicly traded health-care companies by almost one-third. The company, which essentially acts as a middleman between drug-makers and pharmacies, had $9 billion in revenues last year.
CEO Hints at Further Local ExpansionsBut the headquarters relocation won't be a huge job-generator. The move will transfer some 50 existing jobs to Nashville.
Over the longer term, though, Caremark's relocation could have major site selection ramifications.
"We'll need new facilities," Crawford said at the project announcement. "Tennessee will be the first place we look to add those facilities."
Last year, Caremark created 1,000 new jobs, according to company records. The company's $792 million in net income marked an annual increase of more than 315 percent.
Caremark hasn't yet determined where its Nashville headquarters facility will be located. The company currently favors a site somewhere in the downtown area, Crawford explained. The relocation will be completed by the second quarter of next year, he said.
Two Local Players Helped Lure CaremarkTwo members of Nashville's sizable health-care community played big behind-the-scenes roles in recruiting Caremark to Music City. Crawford thanked both - HCA co-founder Thomas Frist Jr. and Vanderbilt University School of Nursing Dean Colleen Conway-Welch - in announcing the relocation.
Conway-Welch's role began to take shape more than a year ago, when Caremark first began contemplating relocating from the Alabama city where it was founded in 1993 (then under its initial moniker, MedPartners). That was when the academician, a Caremark board of directors member, began suggesting a move to the same city that's home to Vanderbilt.
"She kept saying Nashville is a really great place," Crawford said of Conway-Welch, who joined him at the podium for the announcement, along with a range of state and local officials.
Former HCA Chairman Frist, on the other hand, helped sway the decision by picking up a phone. He called Crawford direct after learning that Caremark was contemplating a headquarters move. Nashville would be a wise choice, Frist suggested. HCA, which owns or operates 200 hospitals and other medical facilities, was founded in the Tennessee city in 1968 and remains headquartered there.
"I owe Tom a great deal for calling me," Crawford noted.
Caremark will become Nashville's second-largest publicly traded company. It will trail only HCA, which had $19.7 billion in 2002 revenues.
CEO: 'Nashville a Better Fit'The Fortune 500's No. 267 player will also become one of the largest companies based in Tennessee.
"Caremark will rank as one of the state's five largest publicly traded companies," Gov. Phil Bredesen (D) noted at the project announcement. "Our state's expertise and leadership in the health-care industry will offer them new opportunities for business growth and development." Birmingham also has a substantial health-care cluster. The city has some 50,000 jobs in that sector, most employed in Birmingham's six medical centers.
Tennessee's capital city, though, offered a stronger nurturing network for health-care firms, Caremark decided.
"We felt Nashville fit our company better," Crawford said. "Nashville has a great collaboration that supports the health-care community through the work of the Nashville Health Care Council, Nashville Area Chamber of Commerce, the governor's office and the mayor's office." Metro Mayor Bill Purcell (D) offered a ready amen to Crawford's thoughts.
"Our health-care industry remains particularly robust, a worldwide center for dynamic and innovative companies," Purcell said. "Caremark will further add to that reputation of excellence.
That, along with everything else about Caremark's decision, was sweet music to the ears of Music City's leaders.
©2003 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.