Update: You might be interested to read this post on Allscripts Plans to Discontinue MyWay.
Having just gone through the hell of a board gone wild, perhaps Allscripts’ leadership doubts it has the ability to govern. Or maybe it’s just bracing for the fresh hells that EMR companies will face when the industry’s Big Consolidation begins (something we all know will happen, though not when). Either way, it seems that Allscripts is ready for a change in ownership.
Earlier this week, Bloomberg Businessweek reported that the company has retained Citigroup to explore selling out to a private equity buyer. According to published reports, Allscripts is considering a leveraged buyout, which would take it private but leave it holding a ton of debt. It sure must be eager to avoid scrutiny by curmudgeons on Wall Street!
At least one research type has already given such a move the thumbs up. According to Bloomberg Businessweek, David Windley, an analyst with Jefferies & Co., the move makes sense despite the inherently high costs. Allscripts “continues to climb a steep product integration hill that would be more comfortable out of the public eye,” the site quotes Windley as telling his clients.
Investors seem pleased with the prospect of an Allscripts sale too. Shares of the company (MDRX) rose 14 percent when the news that Allscripts had tapped Citigroup hit the press last week. Clearly, they don’t have complete confidence that the stock is headed for success as the company is constituted today.
There’s no doubt that Allscripts is on a challenging path in creating new, unified product offerings for a feverishly competitive market. The product integration effort Windley is referring to, and it’s a massive one, is the integration of Allscripts products with those of rival Eclipsys Corp., which it acquired in 2010.
Whether integration has been proceeding smoothly or not, it can’t have been a big confidence builder six months ago when Allscripts fired Chairman Phil Pead, who’d come on board when Eclipsys was purchased, and three board members resigned.
Plus, the rumors are swirling about Allscripts planning to sunset MyWay and move users to their Allscripts Professional product. More details on that change as it develops.