Allscripts the leading provider of clinical software, information and connectivity solutions for physicians, and Atlanta-based Eclipsys, which sells solutions and services for hospitals and clinicians, have agreed to merge in an all stock transaction valued at $1.3 billion.
The companies says the combination will create a clear leader in healthcare information technology, with the most comprehensive solution offering for healthcare organizations of every size and setting. Under terms of the merger agreement, Eclipsys stockholders will receive 1.2 shares of Allscripts for each share of Eclipsys, a 19 percent premium based on the June 8th closing price.
By combining the leading physician-office and post-acute care solutions from Allscripts with Eclipsys’s leading enterprise solutions for hospitals and health systems, the combined company will offer a single platform of clinical, financial, connectivity and information solutions.
The combined company’s client base will include over 180,000 U.S. physicians, 1,500 hospitals, and nearly 10,000 nursing homes, hospices, home care and other post-acute organizations.
Glen Tullman, CEO of Allscripts, will be the CEO of the combined company. Phil Pead, president and CEO of Eclipsys will become chair of the combined company.
The merger positions the combined company to help its clients more effectively access the approximately $30 billion in federal funding for hospital and physician adoption of Electronic Health Records (EHR) provided by the American Recovery and Reinvestment Act (ARRA).
Driven in large part by the ARRA incentives, which begin in 2011, EHR adoption by physician practices is projected to grow from 12 percent to 90 percent by 2019, according to the Congressional Budget Office’s March 2009 report, “Options for Controlling the Cost and Increasing the Efficiency of Health Care.”
The CBO report also projects hospital adoption of acute-care EHRs will increase from 11 percent to 70 percent during the same time period.