- Two years after purchasing behavioral health IT provider, Netsmart Technologies, Chicago-based Allscripts said it would be selling its stake in Netsmart for $525 million.
- The deal was a way for Netsmart to access the home-care market and gave Allscripts access to more capabilities such as behavioral health IT functions and post-acute care software. The EHR vendor is reportedly selling its stake to GI Partners — the two companies invested a combined $950 million in Netsmart in March 2016.
- "We believe now is the right time to recognize the significant value we have created by monetizing our investment and improving our balance sheet," Allscripts President Rick Poulton said in a statement.
As many hospitals have adopted EHRs, new bookings or sales for some vendors have waned and many are looking to other areas to grow the business. Most recently, Allscripts competitor athenahealth was sold after weak bookings.
Allscripts reported total Q3 revenue of $522 million and loss for the quarter was $23.8 million.
The EHR vendor recently confirmed an unspecified number of layoffs in an attempt to "rebalance" the company, which took a hit this year when it was struck by the SamSam ransomware that has been targeting healthcare companies.
But the firm has been mostly looking to expand its services this year. It bought patient engagement platform HealthGrid for $60 million in May and started off this year with a $100 million acquisition of cloud-based EHR vendor Practice Fusion. For its part, Netsmart bought Change Healthcare's home care and hospice units in April.
The sale of Netsmart, will allow Allscripts to pay down debt and give it more flexibility to invest in other areas of the business that are growing, the company said. After the deal closes, debt will be reduced to $500 million.
"Allscripts investment in Netsmart helped create a critical solution for caregivers to achieve the value-based care goal of health communities and populations," Allscripts CEO Paul Black said in a statement. "Through our ownership position we quickly generated significant value, and this transaction will be beneficial for our shareholders, our clients and our organization."