Allscripts Agrees to Sell Its CarePort Health Business for $1.35 Billion

Source: Streetwise Reports   10/14/2020

Shares of Allscripts Healthcare Solutions traded 30% higher after the company reported it has agreed to sell its CarePort Health business to WellSky Corp. for $1.35 billion.

Allscripts Healthcare Solutions, Inc. (MDRX:NASDAQ) yesterday announced the “execution of a definitive agreement to sell its CarePort Health (CarePort) business to WellSky Corp., a global health and community care technology company.” The company noted that WellSky is owned jointly by TPG Capital and Leonard Green & Partners which it said are two of the largest private equity firms in the world.

Allscripts Healthcare Solutions explained that its CarePort solutions serve hundreds of hospitals and thousands of post-acute care providers. CarePort effectively and efficiently aids these healthcare facilities and providers in coordinating and transitioning patients through the various settings of care.

The company stated that the agreed upon sale price for CarePort is $1.35 billion, which represents a multiple of more than 13 times CarePort’s revenue over the previous 12 months. The firm added further that the $1.35 billion figure is approximately equal to 21 times CarePort’s non-GAAP adjusted EBITDA over the trailing 12 months. Allscripts stated that at present, CarePort’s revenue represents approximately only about 6% of its total consolidated revenues.

The company stated that it anticipates that the transaction will close by year-end 2020, but remains subject to ordinary closing conditions and regulatory approvals. When the transaction is fully completed, the firm stated that the CarePort client base and associates will transition to WellSky. Until that time, the two companies will continue to remain separate and operate independently. Allscripts advised that it plans to utilize the net proceeds after all taxes to invest in its solutions, deleverage its balance sheet and to make significant share repurchases.

Allscripts Healthcare Solutions’ President and CFO Rick Poulton commented, “WellSky is a great company that will provide both an ideal and permanent home for CarePort and its almost 200 team members…This agreement is another all-around win for Allscripts as it unlocks significant value for our shareholders, enables us to increase our focus on our core business and brings our CarePort customers the benefit of continued investment under new and very strong ownership.”

WellSky’s CEO Bill Miller remarked, “Together with CarePort, WellSky will establish new, meaningful connections between historically disparate settings of care. We have the exciting opportunity to bring care coordination to more providers in service of delivering more informed, personalized care…Through this agreement, we’re ensuring our clients have the intelligent technology they need to do right by their patients, collaborate with payers, and succeed in value-based care models. It’s WellSky’s mission to realize care’s potential, and this moves us that much closer to achieving it.”

Allscripts is an IT solutions firm that provides software and services for clinical, financial and operational needs for the healthcare industry. The firm stated that “its innovative solutions connect people, places and data across an Open, Connected Community of Health™.”

Allscripts Healthcare started the day with a market capitalization of around $1.4 billion with approximately 163 million shares outstanding and a short interest of about 10.6%. MDRX shares opened more than 30% higher today at $11.09 (+$2.78, +33.45%) over yesterday’s $8.31 closing price. The stock has traded today between $10.57 and $11.38 per share and is currently trading at $10.86 (+$2.55, +30.69%).

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