Health IT company Allscripts-Misys Healthcare Solutions has announced it will buy hospital software vendor Eclipsys Corporation in a $1.3 billion all-stock deal.
Eclipsys and Allscripts, two of the largest US health IT vendors will be merged to create a new firm, with a strong presence in both the physician and hospital markets, and well placed to benefit from the $30 billion of government investment earmarked for health IT.
Allscripts, which specialises in solutions for physicians will acquire Eclipsys, which focuses on the hospital market. The newly merged company will have a customer base of 180,000 physicians and 1,500 hospitals.
The combined company will be second only in size to Cerner in the US health IT market. Cerner’s main focus is in the hospital sector.
Allscripts says the combed company it will be "uniquely positioned" to help clients access $30 billion of federal funding to pay for electronic health records.
Glen Tullman, chief executive of Allscripts will become chief executive of the combined company. He said in a company release: “We are at the beginning of what we believe will be the single fastest transformation of any industry in US history”.
He said the combination of the Allscripts electronic health record portfolio in the physician’s office and leadership in the post-acute care market, together with Eclipsys hospital enterprise solution creates “the one company uniquely positioned to execute on this significant opportunity”.
Under the terms of the agreement Eclipsys shareholders will receive 1.2 Allscripts shares for every Eclipsys share. Allscripts majority shareholder Misys Plc, has said it will said it will sell most of its 54.6% stake in the newly merged company. The UK company will hold less than 10% of Allscripts-Eclipsys following the takeover.
Misys, which created the Allscripts-Misys subsidiary in October 2008 through the merger of its healthcare business with Allscripts Healthcare Solutions, said it would focus on its banking software business.
The deal is expected to close in four to six months and is subject to approval from both sets of shareholders.