Constellation Software Inc. completed its agreement with Allscripts Healthcare Solutions to acquire the net assets of Allscripts’ Hospitals and Large Physician Practices business segment, which largely focuses on electronic health record services and backend office support, through its wholly-owned subsidiary, N. Harris Computer Corporation.
Allscripts’ Hospitals and Large Physician Practices business segment includes the Sunrise™, Paragon®, Allscripts TouchWorks®, Allscripts® Opal and dbMotion™ solutions. However, the assets of Allscripts’ Veradigm business segment are not included in this transaction and will continue to be owned by Allscripts going forward.
According to Allscripts’ investor update on March 3, 2022, Allscripts’ management expects revenue for the business segment to be down approximately 3-4% year over year and adjusted EBITDA to be down 10-15% year over year.
The purchase price consists of up to $700 million cash, including a fixed price of $670 million paid at closing plus contingent consideration of up to $30 million based on performance of the business during the two years following transaction closing. Proceeds from the transaction will be used to support share repurchasing as well as strategic M&A for the remaining Veradigm business.
News of this acquisition follows Allscripts’ sale last year of 2bPrecise, a Pittsburgh-based leading healthcare informatics company that specializes in aggregating genetic and genomic data from electronic health records (EHR) in order to further precision medicine initiatives, to AccessCX, an international provider of advanced laboratory diagnostic solutions.
The sale of Allscripts’ assets is an example of a fast-shifting EHR marketplace. Just this past year, we saw the joint sale of another EHR vendor, athenahealth, to private equity firms Bain Capital and Hellman & Friedman for $17 billion. Later, in December 2021, Oracle Corporation, one of the world’s largest technology companies, acquired Cerner Corporation, whose health information and EHR technologies connect people, information and systems around the world, in a deal valued at $28 billion.
William Blair & Company served as advisor and provided a fairness opinion on the transaction to Allscripts Board of Directors.
N. Harris Computer Corporation is a computer software company founded in 1976. The company develops software solutions for the public sector, healthcare, utilities and private sector verticals throughout North America, Europe, Asia and Australia. N. Harris has been a portfolio company of Constellation Software since 1996.
Founded in 1981 and headquartered in Chicago, Illinois, Allscripts Healthcare Solutions is a publicly traded American company that provides physician practices, hospitals and other healthcare providers with practice management and EHR technology.
