Allscripts buying healthcare info rival Eclipsys
Allscripts-Misys buying Eclipsys in $1.3B deal combining healthcare information tech companies
NEW YORK (AP) -- The health care information technology company Allscripts-Misys Healthcare Solutions Inc. is buying rival Eclipsys Corp. for $1.3 billion in stock, the companies said Wednesday.
Allscripts is a leader in providing physicians and their offices with ways to keep tabs on patient care records while Eclipsys provides similar services for hospitals and health systems.
The combined company's client base will include over 180,000 U.S. physicians, 1,500 hospitals, and nearly 10,000 nursing homes, hospices and home care organizations, the companies said.
The deal will also help the companies more effectively give clients access to about $30 billion in federal funding for hospital and physician adoption of electronic health records as part of the American Recovery and Reinvestment Act, the companies said. The incentives begin in 2011.
Adoption by physicians is projected to grow from 12 percent to 90 percent by 2019, the companies said, citing a Congressional Budget Office's March 2009 report.
Under the deal, Eclipsys shareholders will receive 1.2 Allscripts shares for each Eclipsys share, a 19 percent premium over its closing price in Tuesday, the companies said.
Shares of Allscripts, based in Chicago, closed at $18.42 Tuesday while shares of Eclipsys, based in Atlanta, closed at $18.51.
Allscripts CEO Glen Tullman will be CEO of the combined company. Eclipsys CEO Phil Pead will be chairman of the combined company.
The deal has been approved by both companies' boards of directors and is subject to shareholder approval of both companies.
Separately, the British information services company Misys PLC will reduce its 55 percent stake in Allscripts to 10 percent through an underwritten secondary equity offering of its Allscripts shares and by selling shares to Allscripts.
UBS, Barclays Capital and J.P. Morgan acted as financial advisors to Allscripts.
Allscripts expects its buyout of Eclipsys to boost net income, excluding charges, in 2011. The company expects its fiscal year net income in 2010 to reach the high end of its 64 cents to 65 cents per share guidance, excluding charges, on revenue between $700 million and $705 million. Analysts polled by Thomson Reuters expect net income of 65 cents per share on $702.3 million in revenue.
The fiscal year ends in May. After the buyout closes, Allscripts expects to report financial results on a calendar year basis.