StreetSmart Live! Presents Patriot One Technologies Inc. on 10/15/2020. Learn More

Get the Latest Investment Ideas Delivered Straight to Your Inbox.

TICKERS: MDRX

Allscripts Agrees to Sell Its CarePort Health Business for $1.35 Billion

Share on Stocktwits

Source:

Shares of Allscripts Healthcare Solutions traded 30% higher after the company reported it has agreed to sell its CarePort Health business to WellSky Corp. for $1.35 billion.

Allscripts Healthcare Solutions, Inc. (MDRX:NASDAQ) yesterday announced the "execution of a definitive agreement to sell its CarePort Health (CarePort) business to WellSky Corp., a global health and community care technology company." The company noted that WellSky is owned jointly by TPG Capital and Leonard Green & Partners which it said are two of the largest private equity firms in the world.

Allscripts Healthcare Solutions explained that its CarePort solutions serve hundreds of hospitals and thousands of post-acute care providers. CarePort effectively and efficiently aids these healthcare facilities and providers in coordinating and transitioning patients through the various settings of care.

The company stated that the agreed upon sale price for CarePort is $1.35 billion, which represents a multiple of more than 13 times CarePort's revenue over the previous 12 months. The firm added further that the $1.35 billion figure is approximately equal to 21 times CarePort's non-GAAP adjusted EBITDA over the trailing 12 months. Allscripts stated that at present, CarePort's revenue represents approximately only about 6% of its total consolidated revenues.

The company stated that it anticipates that the transaction will close by year-end 2020, but remains subject to ordinary closing conditions and regulatory approvals. When the transaction is fully completed, the firm stated that the CarePort client base and associates will transition to WellSky. Until that time, the two companies will continue to remain separate and operate independently. Allscripts advised that it plans to utilize the net proceeds after all taxes to invest in its solutions, deleverage its balance sheet and to make significant share repurchases.

Allscripts Healthcare Solutions' President and CFO Rick Poulton commented, "WellSky is a great company that will provide both an ideal and permanent home for CarePort and its almost 200 team members...This agreement is another all-around win for Allscripts as it unlocks significant value for our shareholders, enables us to increase our focus on our core business and brings our CarePort customers the benefit of continued investment under new and very strong ownership."

WellSky's CEO Bill Miller remarked, "Together with CarePort, WellSky will establish new, meaningful connections between historically disparate settings of care. We have the exciting opportunity to bring care coordination to more providers in service of delivering more informed, personalized care...Through this agreement, we're ensuring our clients have the intelligent technology they need to do right by their patients, collaborate with payers, and succeed in value-based care models. It's WellSky's mission to realize care's potential, and this moves us that much closer to achieving it."

Allscripts is an IT solutions firm that provides software and services for clinical, financial and operational needs for the healthcare industry. The firm stated that "its innovative solutions connect people, places and data across an Open, Connected Community of Health™."

Allscripts Healthcare started the day with a market capitalization of around $1.4 billion with approximately 163 million shares outstanding and a short interest of about 10.6%. MDRX shares opened more than 30% higher today at $11.09 (+$2.78, +33.45%) over yesterday's $8.31 closing price. The stock has traded today between $10.57 and $11.38 per share and is currently trading at $10.86 (+$2.55, +30.69%).

[NLINSERT]

Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.




Want to read more about Healthcare Services investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe