In less than six months, Allscripts managed to acquire two EHR platforms for a net price of just $50 million, according to Rick Poulton, the company’s president.
After finalizing its $100 million acquisition of Practice Fusion, Allscripts also announced a deal to sell OneContent, a healthcare document-management system acquired through its purchase of McKesson's health IT portfolio finalized in October. OneContent was acquired by Hyland Software Inc., a privately held company that provides content management software.
But based on comments Poulton made during an earnings call on Thursday, that deal appears to be worth as much as $235 million—well above the $185 million that Allscripts paid for McKesson's entire health IT portfolio. Poulton said the two acquisitions have added more than $300 million in recurring annual revenue with a “modest investment of approximately $50 million.” With the Practice Fusion and McKesson acquisitions totaling $285 million, Poulton's comments indicate OneContent sold for 27% more than McKesson's purchase price.
“You should think of it as mid-200s of proceeds,” Poulton said on the earnings call, referencing the OneContent divestiture.
A spokesperson for Allscripts directed FierceHealthcare to the company’s announcement, which does not include OneContent’s purchase price. A Hyland spokesperson said the company does not plan to disclose the purchase price.
Allscripts initially offered to buy Practice Fusion for $250 million in May 2017, but a Department of Justice investigation ultimately drove down the final price, according to documents obtained last month by FierceHealthcare. McKesson was also facing a DOJ inquiry regarding EHR certification when it finalized its deal with Allscripts.
The strategic dealmaking leaves Allscripts to manage three separate EHR platforms that it believes can service different segments of the market as it moves forward. Although bookings dropped $92 million in the fourth quarter compared with the previous year, the company saw a 17% increase in revenue in 2017, totaling $1.8 million. It expects revenue to fall between $2.15 and $2.25 billion in 2018, a 17% to 22% increase.
The company also briefly acknowledged a January cyberattack that impacted two data centers in North Carolina and shut down EHR and billing applications for approximately 1,500 physician practices. Poulton said the attack was traced to malware “never seen before by law enforcement,” adding that the company was taking steps to strengthen its relationship with clients that were affected by the attack.
Allscripts is facing a class-action lawsuit from providers impacted by the cyberattack.
“We take data privacy and security very seriously and we spent tremendous amounts of money protecting our datacenters and our networks,” he said. “Much more than most every self-hosted client could ever afford to spend.”
The estimated purchase price for OneContent is $260 million, according to a Securities and Exchange Commission filing by Allscripts after the markets closed on Friday.