The strategic acquisition of A4 will double Allscripts clinical
software revenues and the size of its sales force, while significantly
expanding Allscripts existing product portfolio and providing the
company with an integrated EHR/PMS for small to mid-sized groups.
Headquartered in Cary, NC, with over 400 employees nationwide, A4 also
provides emergency room and care management solutions to the
multi-billion dollar hospital emergency department and discharge
planning markets. Both are key points of connection with the electronic
In 2005, A4 generated revenues in excess of
$75 million, EBITDA of approximately $15.5 million and net income of
approximately $8.3 million. The transaction consideration will consist
of $215 million in cash and 3.5 million Allscripts shares valued at
approximately $57 million, based on yesterday's closing price of $16.30
per share. Allscripts intends to finance the acquisition using cash on
hand and through the issuance of new common shares.
In the same announcement, Allscripts discloses a new agreement with GE Healthcare.
Alliance Agreement with GE, the parent company of IDX Systems
Corporation (IDX). Under the terms of the amended agreement, Allscripts
existing alliance with IDX will continue through the five years
remaining under the original agreement, supporting the ongoing
integration and compatibility of the Allscripts and IDX products. GE
will continue to offer Allscripts TouchWorks(TM) EHR within the IDX
client base, in addition to its own Centricity(R) Ambulatory EMR. The
Agreement also allows Allscripts to enter the practice management
systems (PMS) market and to offer an integrated practice management and
EHR solution. Depending on the needs and size of the practice,
Allscripts will offer the integrated A4 practice management/electronic
health record solution, its TouchWorks(TM) EHR in combination with the
A4 practice management system, or, for IDX practice management clients,
TouchWorks(TM) EHR integrated with IDX Groupcast or Flowcast products.
Under the terms of the Amended Strategic Alliance Agreement, GE and
IDX have extended their commitment to support integration and
compatibility of the Allscripts and IDX products for the next five
years and beyond. During the next 18 months, GE and IDX will continue
to market Allscripts TouchWorks(TM) EHR and GE's Centricity(R) solution
to current customers and Allscripts will continue to market the
combined Allscripts/IDX solution into the IDX base. New IDX clients
will also continue to receive free interfaces from Allscripts. During
this period, Allscripts has agreed not to market any acquired practice
management system to current IDX customers. For new sales outside the
existing IDX base, Allscripts and GE are free to offer their own
respective practice management and EHR solutions without restriction.
Allscripts royalty obligations for sales to the existing IDX installed
base will be reduced by 50% immediately and will then be phased out
Allscripts is clearly not going to roll over for anyone. A previous post on the GE acquisition of IDX is here.
UPDATE: Here's an AP story on the acqusition.
UPDATE: Tim at HIStalk has a some interesting insight (as always) on the Allscripts/A4 deal. Be sure to scoll down for some good comments too.