Allscripts buys two health software firms to reinvent product line
(Reuters) - Allscripts Healthcare Solutions (MDRX.O) acquired health management software and service providers dbMotion and Jardogs LLC under a wider plan to invest about $500 million this year, as it seeks to breathe new life into its product portfolio after dropping plans to sell itself.
Allscripts did not disclose the amount it paid for Springfield, Illinois-based Jardogs, which offers health management services such as patient kiosks and mobile-based technology for smartphones and tablets.
"I would expect over a period of time, we will make the Jardogs portal available across all of our products," Cliff Meltzer, who heads solution development at Allscripts, told Reuters.
Allscripts had a strong relationship with Jardogs as the private company's chief executive, Jim Hewitt, previously served as Allscripts's chief information officer.
"Since he already knows a lot of our underlying technology and products, the rate at which we can integrate the capabilities and make them available to our clients will be very very rapid for a such key area," Meltzer said.
Allscripts, which sells systems that enable hospitals and physicians to share patient records electronically, shelved plans to auction itself last December, as new Chief Executive Paul Black said the company would rather refresh its existing product line to retain existing customers.
Allscripts said on Monday that it paid about $235 million to take full control of Israel-based dbMotion, in which it already had an investment.
DbMotion has developed a healthcare information-sharing system that allows medical staff secured access to medical records from other doctors through its network.
About 370 hospitals and 2,800 clinics use dbMotion technology globally, Allscripts said in a statement.
The deal value for dbMotion consists of $145 million in cash, $50 million of Allscripts's common stock and $40 million in cash via a note payable, due within 18 months.
Allscripts said it would fund the dbMotion purchase with existing cash and borrowings under a revolving credit facility.
The Chicago company expects the acquisitions to slightly reduce its earnings per share in 2013 but add in 2014.
Allscripts's shares were up marginally at $12.58 on Tuesday afternoon on the Nasdaq. They touched a high of $12.79 earlier in the day.
(Additional reporting by Tova Cohen; Editing by Roshni Menon)