Return of over $1 billion (Â£0.7 billion) to shareholders
Allscripts merger with Eclipsys
Misys plc (LSE: MSY), the global application software and services company, announces it has agreed to sell the majority of its 54.6% interest in its Allscripts subsidiary (NASDAQ: MDRX), and that Misys intends to return substantially all of the proceeds to Misys shareholders. The sale of shares by Misys will provide Allscripts the flexibility to proceed on its proposed merger with Eclipsys (NASDAQ: ECLP).
â¢ Misys will realise significant value for shareholders through the sale, in a placing of shares and through buybacks by Allscripts. Based on illustrative placing and buyback assumptions, the sale of approximately 68 million of its Allscripts shares would raise over $1.3 billion (Â£0.9 billion) and would leave a remaining Misys holding of approximately 12 million Allscripts shares.
â¢ Allscripts will merge with Eclipsys, creating what the Allscripts management believe will be the clear leader in healthcare information technology, with the most comprehensive solution offering for healthcare organisations of every size and setting. The merger will be accretive to earnings per share in Calendar 2011. Eclipsys shareholders will receive $1.3 billion in Allscripts shares, representing 1.2 Allscripts shares for each share of Eclipsys that they own. Misys expects to retain a maximum of 10% of Allscripts-Eclipsys shares, following the merger of the two companies.
â¢ The proceeds from the sale of Allscripts shares, after transaction fees and debt paydown, will be returned to Misys shareholders in due course, intended to be through a Proposed Tender Offer for their shares.
â¢ Significant enhancement to Misys earnings per share upon completion of Proposed Sale and Proposed Tender Offer.
â¢ Greater visibility of the inherent value in Misysâ Banking and Treasury & Capital Markets divisions.
Mike Lawrie, Chief Executive, Misys plc, comments
âThe strategy and execution of the merger of Allscripts and Misys Healthcare has been extraordinarily successful. This has been reflected in the rise in the Allscripts-Misys share price since the completion of the merger in October 2008. The success of the merger has created an opportunity for Allscripts to continue its leadership role by merging Allscripts and Eclipsys to create a leader in end to end solutions for US hospitals & physicians. To enable Allscripts to exploit this opportunity, and to allow Misys shareholders to benefit from the rise in the Allscripts share price since the merger, we are reducing our holding in Allscripts.
Misys shareholders will receive an unprecedented return of capital from the company, over $1 billion, and will see immediate, significant earnings per share accretion.
Following separation, we will continue to focus on leadership in our financial services markets, through taking to market innovative software solutions, notably our BankFusion suite, and providing high quality implementation and customer services.
The sale creates a clear, compelling, pure play investment proposition in financial services, while we also retain a stake in the future success of the newly created Allscripts-Eclipsys.â
Glen Tullman, Chief Executive, Allscripts, comments
âThe Allscripts-Misys Healthcare merger created a leader in ambulatory healthcare IT in the US, focused on the physician practice market. Now, the merger with Eclipsys will create a leader in healthcare IT connecting hospitals, physicians and post-acute organizations.
The merger represents a significant strategic opportunity for Allscripts and Eclipsys to combine their strengths, particularly in Electronic Health Records, resulting in a significantly expanded market presence.
By combining Allscriptsâ Electronic Health Record portfolio in the physician market paired with, our leadership in the post-acute care market, and Eclipsysâ market-leading hospital enterprise solutions, we will create the one company uniquely positioned to help our clients benefit from $30 billion in government funding for Electronic Health Records.
The US healthcare system is rapidly moving towards collaboration between providers across all healthcare settings, with the objective of a single patient record connecting providers across entire communities. Allscripts and Eclipsysâ leading positions in the physician practice market, post-acute settings and in hospitals will enable us to deliver a complete portfolio of clinical, financial, and information solutions, creating a seamless patient experience and improved care at lower cost.â