Wednesday, 19 March 2008

Misys and Allscripts

I rather liked Misys’ plans to ‘merge’ its US healthcare operations with its rival Allscripts which will retain its NASDAQ listing. Basically Misys will take a 54.5% stake for $330m. Misys will continue its UK listing but only for the banking-related bits. See Financial Times 19th March 08 Misys spins out healthcare into Allscripts deal. The deal offers both scale and cost savings (possibly $30m pa in a few years time).

As my (ex-) Ovum Holway colleague Tola Sergeant said “There is a good fit between the two businesses. Misys Healthcare is strong in the US physician (GP) market for practice management systems - about 20% of US physicians use a Misys system. Allscripts, on the other hand, is strong in the clinical applications space with products including an electronic health record and personal health record. Moreover, Misys tends to focus on the lower end of the physician market, while Allscripts' customer base tends to be at the higher end. Bringing the two companies together will enable cross-selling and, in particular, allow Allscripts to target Misys' large footprint with its clinical applications.”

The market initially gave it the thumbs up with the shares up from 140p to nearly 170p but all the gains were reversed today (Wednesday).

It’s now over a year since Mike Lawrie took over from Kevin Lomax after his failed MBO bid. I think he’s done a good job. But this has not been reflected in the Misys share price which has fallen from 199p when he was appointed to 143p today. Lawrie is sharing the pain with shareholders (like me). He bought £500K worth of shares on appointment with a promise of bonus matching shares when the share price reached 225p. A long way to go now.

No comments: