NEW YORK (Reuters) - Private equity firms Carlyle Group LP (CG.O), Blackstone Group LP (BX.N) and TPG Capital LP are bidding for Allscripts Healthcare Solutions Inc (MDRX.O), a healthcare technology company exploring a sale, people familiar with the matter said.
These buyout firms submitted second-round offers on Friday, a day after Allscripts reported weak quarterly earnings and following meetings with the company’s management last month, four sources said this week. They asked not to be named because details of the auction are not public.
Allscripts, which has a market value of around $2 billion, has asked for a substantial premium to its current trading prices and there is no guarantee a deal will be reached, the people said.
The private equity bidders are in due diligence and any decision is still weeks away, they said.
A few other buyout firms that also looked at Allscripts, including Bain Capital LLC, have decided not to pursue a deal partly because of the company’s high price expectations and management turmoil, the people said.
Allscripts, Carlyle, Blackstone and TPG declined to comment. Bain did not immediately respond to requests for comment.
The parties still involved in the process remain concerned about valuation, as well as Allscripts’ declining earnings and market share losses to larger rivals such as Cerner Corp (CERN.O), according to the people familiar with the matter.
Allscripts shares are up more than 10 percent since September 28 when Bloomberg reported the company was exploring a sale. The news agency also reported that Allscripts attracted first-round offers from Blackstone, Carlyle and Silver Lake Management.
The stock rose 0.5 percent to close at $12.32 on the Nasdaq market on Tuesday.
Allscripts said last week it was evaluating strategic alternatives following potential buyout interest and has enlisted Citigroup Inc (C.N) to assist with the process.
The auction comes months after activist shareholder HealthCor Management installed three of its nominees to Allscripts’ board, following a bitter fight with the company’s management led by Chief Executive Glen Tullman.
HealthCor, which owned 7.5 percent of Allscripts as of June 30, sued the company in May to be allowed to launch a proxy fight after Tullman refused its demand to resign. The company settled the fight in June, by agreeing to add HealthCor’s candidates to the board.
Tullman said last week that Allscripts’ software bookings fell 39 percent in the third quarter from a year ago and blamed the results partly on speculation about the company’s “future corporate autonomy.”
Reporting by Greg Roumeliotis and Soyoung Kim in New York. Editing by Andre Grenon