$12.8-billion deal for Canadian(ish) tech firm

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So long Catamaran Corp., we barely knew you. Catamaran has agreed to sell itself to health insurer UnitedHealth Group Inc. for $12.8-billion (U.S.), giving the buyer a leading player in the pharmacy benefit management and record keeping business. To the naked eye this looks like a deal between two U.S. companies, but in fact, it's one of the largest takeovers of a Canadian technology company ever – as long as you apply an asterisk or two.

Catamaran may have its corporate head offices just outside Chicago and boast an all-American board, but the company has held on to its humble roots as a Canadian company founded 22 years ago as Systems Xcellence Inc. The company, then based in Milton, Ont., was one of many small, seemingly struggling tech companies that popped out of nowhere during the dot-com bubble, going public in 1997 in Canada via a reverse takeover. It sold software to firms that managed prescription drug claims.

In the early 2000s the company began buying up some of its clients, focusing on firms that served U.S. employers and governments. The company moved its head office to Schaumburg, Ill. and went public on the Nasdaq in 2006. Through the back half of the 2000s, the company hit its stride and was crowned by Fortune in 2010 as the fastest growing company in the U.S., changing its name first to SXC Health Solutions Corp and later to Catamaran.

Through it all, Catamaran remained a Canadian company, if only as a technicality (it has less than 50 employees left in Canada, or barely 1 per cent of its 4,500 overall). Catamaran is still officially a Yukon Territory–registered company interlisted on the TSX and Nasdaq indexes. It is a member of the elite S&P/TSX 60 and the second largest name in the Toronto exchange's health care index (after Valeant Pharmaceuticals International Inc., another technically Canadian company whose management runs the show from the U.S.).

Because it is regarded as a health care company, Catamaran is often overlooked as a technology company, even though its success is built around a software platform; if it were on the TSX's information technology index, it would rank second in market capitalization behind CGI Group Inc. Now it is destined to vanish from Canadian indexes altogether, completing its disappearing act from Canada.

The main financial advisor to UnitedHealth subsidiary OptumRX, which will be merging with with Catamaran, is JPMorgan, with Bank of America and Morgan Stanley providing advisory and fairness opinion work. Catamaran's financial advisor is Blackstone Group. Legal advisors on the deal for the buyer are Sullivan & Cromwell LLP in the U.S. and Blake, Cassels & Graydon LLP in Canada; and for the seller, Sidley Austin LLP in the U.S. and Baker & McKenzie in Canada.