Misys offloads healthcare units
23 July 2007 | 1757 views | 0
Misys plc announces today (23 July 2007) that it is rebalancing its Healthcare portfolio and disposing of businesses which are not consistent with its strategy.
In order to improve performance and focus on its stated core competency in Healthcare, Misys will re-align the business around its established position in the ambulatory space.
Mike Lawrie, Misys plc Chief Executive, said: "Our strategy in Healthcare is to focus on our core competency in the ambulatory space. These disposals rebalance our portfolio and enable us to accelerate execution of our strategy. In addition we have signed commercial agreements with the purchasers that open new distribution channels for our solutions and support our strategy of connecting communities in the higher growth ambulatory sector."
Diagnostic Information Business
Misys will sell its Diagnostic Information Business to Vista Equity Partners for $381.5m (approximately £186m) in cash. Gross assets of the Diagnostic Information business at 31 May 2007 are £155m, with revenue in the year ended 31 May 2007 of £79m and operating profit of £23m. The business is based in Tucson, Arizona and employs 750 people.
The Diagnostic Information Business is a supplier of systems which automate the processes of hospital departments by managing and classifying large volumes of clinical data. In contrast, Misys is focused on driving value for customers in the ambulatory and connected community setting and therefore this disposal is in line with the Misys strategy announced on 8 March 2007.
Due to its size, this disposal is a Class 1 transaction under the UK Listing Rules and therefore requires the approval of Misys Shareholders. Approval will be sought at an Extraordinary General Meeting (EGM), notice of the EGM, and a related Circular, will be sent to shareholders in due course.
Misys has agreed to sell its CPR Business, a system for collecting and sharing data within hospitals, to QuadraMed Corporation, for $33m (approximately £16m) in cash. Gross assets of CPR were £6.9m at 31 May 2006, with revenue generated of £15.2m and a loss before tax of £4.2m in the year. The business is based in San Bernardino, California and employs 50 people.
Misys will enter into commercial agreements with both purchasers, who will act as re-sellers of Misys Connect, the innovative Misys technology that connects hospitals with physicians and other venues of care in the healthcare market. In addition, Vista will also market the Misys Electronic Medical Record (EMR) product as their preferred EMR solution for ambulatory physicians. The commercial agreements will come into effect following completion of each transaction.
Use of Proceeds from the Transactions
Proceeds from the disposals will be used to pay down debt and for general corporate purposes. In addition, the proceeds will provide Misys with the financial flexibility to consider other uses, including potential acquisitions or a share buy back programme.
UBS Investment Bank is acting as exclusive financial advisor and Allen & Overy LLP is acting as legal counsel to Misys plc on the disposal of the Diagnostic Information Business. Kilpatrick Stockton LLP is acting as legal counsel to Misys plc on the disposal of the CPR Business.