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Online giant Amazon buying PillPack, which employs 500 in Manchester

New Hampshire Union Leader

June 29. 2018 9:33AM
CEO TJ Parker, above, gives a tour of PillPack in Manchester in 2016. The company, which is being acquired by Amazon, employs 500 people in its Waumbec Mill offices in Manchester's Millyard. (DAVID LANE/UNION LEADER FILE)

MANCHESTER — Amazon is coming to New Hampshire in a big way after all.

The giant online retailer is buying PillPack, a major Millyard employer that packages and ships pills in individual packets for tens of thousands of customers.

“I think it is very telling and a great sign for Manchester’s future that two of the leading technology companies in the world, Amazon and Oracle, chose to invest here and provide our already burgeoning tech ecosystem with international horsepower,” said Mike Skelton, president and CEO of the Greater Manchester Chamber of Commerce.

The Amazon deal is the second acquision of a major Millyard presence in less than two years.

Tech giant Oracle announced in November 2016 it was buying Dyn, which helps move data traffic on the internet and employed more than 400 at the time.

Amazon said there would be no changes to PillPack’s Manchester location, which counts about 500 employees at its flagship online pharmacy.

Last year, New Hampshire leaders pitched a 603-acre site in Londonderry for Amazon to build its second headquarters, but the state didn’t crack the list of 20 finalists.

An Amazon spokesman said Thursday that the state’s HQ2 proposal played no role in the decision to acquire PillPack. Amazon already operates a warehouse in Nashua.

PillPack, based in Somerville, Mass., first rented 1,600 square feet in the Waumbec Mill on Commercial Street in 2013 and now occupies about 100,000 square feet there.

“That is certainly unique just given that short period of time and the quick amount of growth,” said Benjamin Kelley, a broker in commercial real estate for Brady Sullivan Properties, which owns the building.

Ken Gillis, owner of Ken’s Pharmacy less than 1 and a half miles away on Elm Street, applauded the company’s success.

“I say congratulations to the guys over there with PillPack,” he said. “They came up with a great product and it really, really took off.”

Gillis said he’s not sure how Amazon’s acquisition will affect his business, though mail-order prescriptions already have made a significant dent.

“I believe people who are already using a mail-order pharmacy will probably gravitate toward the Amazon, Amazon Prime,” he said. “The people who like to stay locally will probably continue to do so.”

Taylor Caswell, commissioner of the state Department of Business and Economic Affairs, called it a “huge” deal and another example of a “tech ecosystem” drawing more interest in Manchester.

“Whether you’re talking Oracle-Dyn or PillPack or ARMI (Advanced Regenerative Manufacturing Institute) and the companies it brings, there is a common denominator around, I think, access to a very high-quality work force, a regional workforce and companies like this like to be around each other,” Caswell said.

The purchase price for PillPack, which has about 1,000 total workers, wasn’t disclosed Thursday but will become available in future company filings, Amazon said. The deal should close before year’s end.

Matt Cookson, executive director of the New Hampshire High Tech Council, called the deal “an example of yet another New Hampshire success story getting on the radar of a significant national player. I hope Amazon recognizes the great working environment we have here and will invest in more local growth for PillPack.”

PillPack — which landed on the Forbes Magazine list predicting the next billion-dollar startups — has tens of thousands of customers, who enrolled by phone or through online options.

The company had raised $118 million in venture capital as of last October.

PillPack CEO TJ Parker at that time said he expected explosive growth in the coming years to what was already $100 million in yearly revenues.

“I think if we’re double or triple in five years, we’ll be pretty disappointed,” Parker said. “I think there’s an opportunity to grow much faster than that.”

Said Skelton: “Today’s news is yet another signal that Manchester has arrived as a national hub of technology and innovation.”

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