Allscripts Sells Stake in Hospital Business Segment for $700M

Allscripts, a health IT vendor has inked a deal with Constellation Software subsidiary, N. Harris Computer Corporation (Harris), selling its hospitals and large physician practices business segment for a price consideration of up to $700 million.

“Allscripts has a long and rich history of providing solutions to healthcare organizations,” Jerry Canada, president of Harris healthcare, stated in a press release. “Harris is excited to welcome the staff and customers that helped make Allscripts a success in the hospitals and large physician practices segment. We believe that the employees and customers of both organizations will benefit from the possibilities created by this forever relationship.”

Harris will acquire a majority of the Allscripts hospital EHR business, including Sunrise, Paragon, Touchworks, Opal, Star, HealthQuart, and Db Motion. The sale does not include assets of the Allscripts Veradigm business segment, which is a health information technology integration that delivers data to providers to boost clinical efficiency and care quality.

At the end of 2021, the gross revenue of Allscripts’ Hospitals and Large Physician Practices was over $900 million.

“The medical industry we faithfully serve has gone through tremendous change, and the needs of the customers in our different business segments continue to evolve in different ways,” Paul M. Black, chief executive officer of Allscripts, said in the press release.

“We think this transaction maximizes focus as well as future opportunity for our clients, our more than 7,500 associates and our shareholders,” Black added.

As a part of the agreement, Harris will pay Allscripts a fixed price of $670 million upon completion of the deal and a contingent consideration of up to $30 million depending on the business performance two years following the closing of the sale.

“Harris has demonstrated excellence in software development, customer satisfaction, and worldwide growth in healthcare,” Black said. “We are pleased that our solutions will be a key strategic component of Harris’ plans to become leaders in digital health. As the cornerstone of the Harris portfolio, we are proud that our customers will continue to benefit from a true platform of health.”

Allscripts has sold a slew of its stakes in the last few years. In 2018, Allscripts sold its joint venture stake in behavioral health EHR company Netsmart for $525 million after two years of owning about 50 percent of the company. Allscripts stated it would use the $525 million to repay long-term debt and invest in other growing areas of its business.

Allscripts’ recent business ventures have focused on advancing interoperability. Recently, the health IT vendor Veradigm, a business unit of Allscripts, partnered with the Social Security Administration (SSA) to support EHR interoperability for disability claims. By allowing SSA to electronically request and receive EHR data through the vendor’s network solution, the health It can minimize clinician burden related to EHR data exchange.