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Selling, staying and growing

The chief of the electronic drug reference company explains why it went looking for a buyer and what will likely happen to the Tampa outfit.

By KRIS HUNDLEY
Published April 20, 2006

A Tampa company that provides online drug information to everyone from doctors in HCA hospitals to consumers on Walgreens' Web site is being acquired by Elsevier, a $2.5-billion health care publisher in Amsterdam. Terms of the deal, expected to close by the end of the month, were not disclosed.

Gold Standard Inc. was started in 1993 by Dr. Jon Seymour, a radiology resident at the University of Florida who created an electronic drug reference book that quickly gained favor with pharmacists, physicians and hospitals. The company, funded with $1-million from a friend's father, flirted with the idea of going public during the dot-com boom, struggled for financing after the bust, brought in new management in 2002 and received venture funding after becoming profitable in 2003.

Russell S. Thomas, who replaced Seymour as chief executive in September 2002, talked Wednesday about why Gold Standard was ripe for acquisition, key factors in the decision and his confidence that the company will continue to grow in Tampa.

Why was Gold Standard looking for a buyer?

We've been on a great run here for the last few years and the business has been performing very well, with revenues in the $15-million to $20-million range. But our ownership group has been in it since 1993, and clearly as investors, there comes a time when you want a return on investment. We looked at market conditions, our success historically and our prospects going forward, and thought it was a good time to test the waters.

What did you want in a buyer?

I work for the shareholders - with the founders and angel investors being the largest - so I wanted to generate as high a return as possible on the sale. But from a community standpoint, I want to stay here and build this company here. So our focus was on finding a buyer that wasn't looking to take us over, move us or integrate us into an existing competitive business, or do anything other than give us the resources and support to continue executing our mission.

How do your products complement what Elsevier does?

Elsevier (pronounced el-se-veer) has a set of online clinical reference products for health care professionals dealing with disease and treatment protocols. What it doesn't include in any meaningful fashion is drug information, which is what we have. I'd anticipate the marriage of those two assets down the road so if a doctor or consumer is reading the most recent information on diabetes, for instance, there would be links to our information on the appropriate drugs. If you believe what's happening out there with consumers becoming more personally and financially responsible for their health care, you have to provide the resources to make informed decisions. Our vision is to become the "Intel Inside" of clinical information for health care professionals and consumers.

What sealed the deal?

Price, first and foremost. Elsevier (a subsidiary of Reed Elsevier Group, owner of LexisNexis) seemed committed to allow us to maintain the entrepreneurial spirit that got us where we are.

We, as a management team, are all staying on, and the entire company is remaining intact. We now have 83 employees and expect to have close to 100 by the end of the year. My goal is to continue to build the company in Tampa Bay. There's no reason why, within five years, we can't have several hundred employees here.

Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.

[Last modified April 20, 2006, 01:48:15]