New Era on Horizon....Weak & Weaker Continues...

Misys Pays $330 Million to Merge Unit With Allscripts

Misys, the IT software group, is spinning off its healthcare division and merging it with smaller US rival Allscripts to create a more powerful player in the growing market for electronic medical records.
The complex deal, which will see Mike Lawrie, Misys chief executive, become executive chairman of the enlarged group, is being paid for via a share placing of 43m shares to raise £75m.
ValueAct Capital, the US hedge fund and largest shareholder in Misys, will underwrite the 175p a share placing and will enlarge its holding from 19.4 per cent to 25.8 per cent on completion of the deal.
Misys will contribute $330m in cash to the enlarged group and will own 54.5 per cent on a fully diluted basis. Allscripts’ existing shareholders will receive a $330m special dividend following the completion of the deal. The enlarged US group will retain a Nasdaq listing.
Misys will retain control of its banking, Treasury and capital markets division, which will retain its London listing.
The London listed shares of Misys surged more than 18 per cent or 25¾p in lunchtime trading to 167½p as investors noted the significant premium payed by ValueAct to increase its shareholding in the group.
“There is a huge opportunity to capitalise on the fundamental shift taking place in the high growth, ambulatory healthcare sector where innovative technology can improve the delivery of care,” Mr Lawrie said in a statement to announce the deal.
“Combining our businesses will create a company better able to take advantage of this opportunity and to maximise value for both sets of shareholders.”
Glen Tullman, chief executive of Allscripts, said the clinical software sector was growing rapidly. “Merging two of the leading businesses within this sector will create a comprehensive platform of products and services that can better serve a wider range of customers and will capitalise on this opportunity.”
Both groups said the enlarged company would provide a range of software services to the healthcare industry in the US. The merger will create savings of $25m to $30m within three years.
The number of physicians using electronic health records in the US is growing. The federal government is expected to encourage its development and the market as a whole is expected to grow to about $5bn by 2015.
Allscripts is headquartered in Chicago and distributes medications to 40,000 physicians in the US and more than 700 hospitals.
Misys said as well as the share placing it had agreed a new $305m debt financing package to complete the deal, which is expected to increase earnings after its first full year.
The group said trading at its other divisions was ahead of expectations and it expected revenue for this year to be between £479m and £488m compared with £469.7m last year.
The demerger of the healthcare division is the latest upheaval for a company that has faced significant change in the last few years.
Less than two years ago Kevin Lomax, co-founder and significant shareholder of the software group, led an attempt to buy Misys which failed. The collapse of the auction led to the departure of Mr Lomax and the appointment of Mr Lawrie, a veteran of the IT industry, who joined from ValueAct.
Mr Lawrie said on Tuesday the agreement with Allscripts will “transform Misys into a growth company.”
The company said that it would drop dividend payments following this year’s payment at the end of the financial year in May.
ValueAct, which has gradually increased its ownership of Misys in the last two years, welcomed the agreement with Allscripts.
“I applaud Mike Lawrie’s turnround of Misys,” said Jeff Ubben, founder of ValueAct. “This is a major step in pursuit of Misys’ growth strategy.”
Source: Financial Times, London

God Help Michigan Docs !!! .....They chose Misys

Michigan docs choose a vendor to help build HIE
Healthcare IT News By Richard Pizzi, Associate Editor
09/13/07

GRAND RAPIDS, MI – West Michigan Physicians Network, an organization of 450 physicians representing various medical and surgical specialties and practice sizes, has named a preferred healthcare IT vendor to help it create a community-wide health information exchange. The WMPN Board of Directors has endorsed software products offered by Misys Healthcare Systems of Raleigh, NC, including the Misys EMR for electronic medical records and the Misys Tiger practice management system.


The physician network announced that, as EMR adoption increases in West Michigan, physicians could begin sharing selected patient information and data via the Web-based Misys Connect technology. “WMPN leadership strongly believes in the long-term value of EMR in supporting the patient care goals of our physician practices and the community,” said Tom Janda, executive director of West Michigan Physicians Network. “Our job is to assist our members in making the best decisions regarding EMR, to negotiate attractive contract terms, and to assist where possible with implementation.”According to Misys, multiple practices within WMPN are already using the company’s products, and the vendor claims that its broad customer base in the western Michigan area was a major factor in the selection process. “In reaching this important decision point, the West Michigan Physicians Network has fulfilled a primary commitment to its physician members and also outlined a promising future for the patient population of the state,” said Mike Etue, senior vice president of sales for Misys Healthcare. As part of the new relationship, WMPN said that its members already are starting to take advantage of pre-negotiated contract terms and favorable product pricing to deploy new software in their practices.