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CPSI to Acquire Healthland for $250 Million and Announces Expansion of Its Senior Management Team

MOBILE, Ala.–Computer Programs and Systems, Inc. (NASDAQ:CPSI), a leading provider of healthcare information solutions to rural and community hospitals, today announced that it has entered into a definitive agreement to acquire Healthland Holding Inc. and its affiliates, Healthland Inc., American HealthTech, Inc. and Rycan Technologies, Inc. The acquisition will strengthen CPSI’s position in providing healthcare information solutions in the markets it serves and will provide new growth markets for the combined company. CPSI also announced the expansion of its senior management team to lead the Company going forward.

Healthland provides electronic health records (EHR) and clinical information management solutions to over 350 hospital customers. American HealthTech is a provider of clinical and financial solutions in the post-acute care space, serving over 3,300 skilled nursing facilities. Rycan offers SaaS-based revenue cycle management workflow and automation software to over 290 hospital customers.

Transaction Highlights:

  • Strengthens CPSI’s position in providing healthcare information systems to community healthcare organizations with approximately 1,200 combined hospital customers;
  • Introduces CPSI to the post-acute care market;
  • Expands the products and capabilities of TruBridge with the addition of Rycan and its suite of revenue cycle management software products; and
  • Immediately accretive to adjusted earnings per diluted share.

The combined company is projected to have annual revenues of approximately $300 million in 2015 and more than 1,900 employees. The transaction is expected to be more than 35% accretive to CPSI’s adjusted earnings per diluted share in 2016 and more than 50% accretive in 2017. Adjusted earnings, a non-GAAP financial measure, include a cash tax benefit from the acquisition and exclude share-based compensation expense, one-time transaction costs, and acquisition-related amortization and deferred revenue adjustments.

“We are excited to welcome Healthland into CPSI’s family of healthcare IT companies,” said Boyd Douglas, president and chief executive officer of CPSI. “Healthland’s history tracks a very similar course to that of CPSI, as we both have over 30 years of experience in the healthcare IT space, and we share a strong commitment to the improvement of community healthcare. The combination of these two long-standing companies creates in CPSI a broad product portfolio across the continuum of care. Together, we will service a client base of approximately 1,200 acute care facilities and more than 3,300 post-acute care facilities, including Healthland’s American HealthTech subsidiary. As the healthcare industry transitions to value-based reimbursement, our combined solutions will connect communities, patients and providers to facilitate more effective population health management, better patient engagement, and the advancement of quality and care coordination. In addition to an expanded client and solution base, the acquisition will also create synergies in our healthcare services offerings to address the acute and post-acute care markets’ demand for improved financial and operational performance. There is no doubt that the addition of Healthland, along with American HealthTech and Rycan, will not only improve CPSI’s offerings in the healthcare IT market, but will provide our combined company with greater opportunities for growth and significantly deepen our knowledge, resources and experience base. We are confident this combination will allow us to continue to be a leading innovator with greater benefits for our customers and the communities they serve, both now and in the years to come.”

Chris Bauleke, chief executive officer of Healthland, stated, “With the ongoing transformation in community healthcare, this combination will enable us to deliver solutions faster for our clients and better scale our development investment and customer support across the many communities we serve. Delivering meaningful solutions for our customers as they prepare for the transition into value-based payment models will continue to be a priority.”

Bauleke added, “Healthland’s acquisitions of American HealthTech, a provider of EHR solutions for post-acute care facilities, in 2013, and Rycan, a revenue cycle solutions company, in April 2015, provide immediate benefits to the markets and solutions that the combined company can leverage.”

Following the acquisition, support for Healthland’s core platforms, Classic and Centriq, will remain in place. Current implementations will continue, and CPSI plans to support and invest in the Centriq platform for at least the next seven years. The Healthland Classic platform will continue to be supported for a minimum of two years, as outlined by Healthland management at their recent Connect 15 User Conference.

Transaction Summary

The contemplated total aggregate consideration to be paid by CPSI is $250 million, payable approximately 65% in cash and 35% in CPSI common stock, subject to certain adjustments at and after closing, as provided for in the merger agreement. The completion of the transaction is subject to review under The Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the satisfaction of other customary closing conditions, and is targeted to close in 2015.

To finance the transaction, CPSI will use cash available on its balance sheet, $150 million of funded debt from a new senior secured credit facility and shares of its common stock. CPSI and Regions Bank have executed a committed financing letter for the new senior secured credit facility that CPSI intends to enter into at the time of closing the transaction.

CPSI’s financial advisor in this transaction was Allen & Company LLC and Maynard, Cooper & Gale, P.C. and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to CPSI. Shearman & Sterling LLP served as legal counsel to Healthland.

CPSI’s Management Team

CPSI also announced a series of changes that expand its management team, effective immediately. David Dye, in addition to continuing to serve as chairman of the board, has assumed the new role of chief growth officer of CPSI and will be focused on driving growth in all segments of CPSI’s business. Chris Fowler, president of TruBridge, will assume the additional role of chief operating officer of CPSI and will be responsible for managing the integration of Healthland and CPSI. Matt Chambless, currently Director of Financial Reporting, is assuming the role of chief financial officer of CPSI.

“Having David Dye focus his experience, industry knowledge and leadership on growth is an exciting opportunity for our company, particularly as we add the Healthland companies to our business,” added Douglas. “Chris Fowler is a proven leader in our company and the right person to lead our operations and the integration of Healthland and CPSI, and Matt Chambless has earned the confidence of our management team and our Board.”

“I am excited about my role as chief growth officer and the opportunity to work with our team to expand our customer base and offer additional products and services in the markets we serve,” noted Dye, who like Boyd Douglas has been with CPSI for over 25 years.

CPSI also announced that Chris Bauleke has agreed to stay on as president of Healthland. Douglas added, “Having Chris as part of our team will be very valuable as we work to integrate these two businesses and position the combined company for future growth. Chris is an experienced executive and has been instrumental in positioning Healthland to compete in a dynamic and growing market. We believe that we have the right team to lead our company into the future and take advantage of the additional opportunities to serve our current customers and expand our service offering. With the addition of the Healthland companies, we also believe it is the right time to expand our senior leadership team and promote some of our younger managers.”

Conference Call

CPSI will discuss the transaction in more detail during a conference call Wednesday, November 25, 2015, at 10:30 a.m. ET. The Company will also provide a slide presentation in connection with the conference call and webcast. A 30-day online replay will be available approximately one hour following the conclusion of the live webcast. To listen to the live webcast or access the replay, visit the Company’s website, www.cpsi.com.

About Healthland

Healthland is a leading provider of integrated technology solutions to rural community and critical access hospitals. Software and services from Healthland, including electronic health records (EHRs), help customers share patient information across care settings to coordinate treatment, improve patient outcomes, and drive patient satisfaction. Healthland is the parent of Mississippi-based American HealthTech, one of the nation’s largest providers of financial and clinical technology solutions in post-acute care. Healthland is headquartered in Minneapolis, Minn., with offices in its founding rural community of Glenwood, Minn. More information is available at www.healthland.com.

About CPSI

CPSI is a leading provider of healthcare solutions for community hospitals. Founded in 1979, CPSI is the parent of two companies – Evident, LLC and TruBridge, LLC. Evident provides comprehensive EHR solutions for community hospitals. TruBridge focuses exclusively on providing business, consulting, and managed IT services to community healthcare organizations, regardless of their IT vendor. For more information, visit www.cpsi.com, www.evident.com, or www.trubridge.com.

November 25, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

46% of U.S. Physician Groups plan to join a Health Information Exchange (HIE)

Burlington, VT – HIMSS Analytics continues the series of strategic industry reports previously published by CapSite with the release of the 5th Annual U.S. Ambulatory Electronic Health Record (EHR) & Practice Management (PM) Study.  The study represents unique Voice of Customer (VOC) insight from more than 800 physician groups on market adoption, market share, market opportunity and vendor mind share across the U.S. physician market.  Additionally, it incorporates information from the HIMSS Analytics® Database for a comprehensive snapshot of the Ambulatory EHR and PM marketplace.

“The year-over-year analysis that we provide allows for an in-depth understanding of industry trends,” said Brendan FitzGerald, HIMSS Analytics Research Director. “While both the tethered and non-tethered Ambulatory EHR markets show signs of maturing, there is continued opportunity with 35% of respondents planning to purchase, replace, or upgrade an Ambulatory EHR solution.”

The study includes Voice of Customer (VOC) insight on physician group:

  • Status on receiving incentive funding for Stage 1 of Meaningful Use (MU)
  • Plans for purchasing or upgrading Ambulatory EHR & PM solutions
  • Primary drivers behind decisions to replace current Ambulatory EHR & PM solutions
  • Plans for joining a Health Information Exchange (HIE)

Vendor Market and Mind Share coverage includes:

Acumen, ADP AdvancedMD, Allscripts, Amazing Charts, Aprima, athenahealth, BioMedix, Cerner, CPSI, eClinicalWorks, e-MDs, Epic, GE Healthcare, Greenway, Healthland, HMS, McKesson, Meditech, MedNet, MedPlus, MED3000, NextGen, OptumInsight, Practice Fusion, Siemens, Vitera

About HIMSS Analytics
HIMSS Analytics is a wholly-owned, not-for-profit subsidiary of the Healthcare Information and Management Systems Society (HIMSS). The company acquired CapSite in October 2012 and offers a portfolio of healthcare information technology market intelligence products and services, including detailed analytics tools, market research, and customized consulting. Visit www.himssanalytics.org or www.capsite.com for more information.

June 12, 2013 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Meaningful Use Early Birds, Enterprise Vendors Not the Only Ones Seeing Success

Today KLAS is pleased to announce the publication of a new report the examines meaningful use attestation. Some highlights from the study are below.

—  Both large and small hospital vendors found success in the first year of meaningful use attestation.
—  Depending on the vendor, some providers also saw a higher ROI for their meaningful use expenses than others, with the community hospitals covering their meaningful use costs more easily than larger IDNs.
—  In certain areas all vendors performed poorly-even those like Epic, who might be expected to be ahead of the curve.
—  Hospitals using Allscripts, Healthland, HMS, McKesson, and Siemens were slower to take off than others using Cerner, CPSI, Epic, and MEDITECH.

Small hospitals reach Stage 1 in large numbers and achieve greater incentive payment ROI; problem lists and quality measures level the playing field with large hospitals.

Orem, Utah – February 21, 2012 – CMS data shows that both large and small hospital vendors found success in the first year of meaningful use attestation. Hospitals using Allscripts, Healthland, HMS, McKesson, and Siemens were slower to take off than others using Cerner, CPSI, Epic, and MEDITECH. KLAS interviewed 104 providers who successfully attested for meaningful use to analyze their vendor successes and struggles in the study Meaningful Use Attestation 2012: Early Birds Take Flight.

Although large vendors like Cerner and Epic met already high expectations, some vendors on the CMS chart were more surprising. CPSI was a standout in the community space with 139 hospitals, second only to Epic in having the largest percent of their client base successfully attest. Though not without their challenges, community vendors Healthland and HMS also delivered significant numbers of successful clients.

Some large vendors-like Allscripts, McKesson, and Siemens-had successful attesters, but it was a small number compared to the size of their client base, for reasons detailed in the report.

KLAS reports that MEDITECH is both a success and a struggle for providers. While they have the highest number of successful attesters at 203, the bulk of their attesters came from one large IDN.

The report also examines some areas where all providers experienced challenges and all vendors performed poorly-even those like Epic, who might be expected to be ahead of the curve. Problem lists and reporting topped the list of provider frustrations. Depending on the vendor, some providers also saw a higher ROI for their meaningful use expenses than others, with the community hospitals covering their MU costs more easily than larger IDNs. Additionally, providers shared advice based on their experience with MU attestation.

To learn more about providers’ experiences attesting for meaningful use with their vendors, the report Meaningful Use Attestation 2012: Early Birds Take Flight is available to healthcare providers online for a significant discount off the standard retail price. To purchase, healthcare providers and vendors can visit www.KLASresearch.com/reports.

About KLAS

KLAS is a research firm specializing in monitoring and reporting on the performance of healthcare vendors. KLAS’ mission is to improve delivery by independently measuring vendor performance for the benefit of our healthcare provider partners, consultants, investors, and vendors. Working together with executives from more than 4500 hospitals and more than 2500 clinics, KLAS delivers timely reports, trends, and statistics that provide a solid overview of vendor performance in the industry. KLAS measures performance of software, professional services, medical equipment, and infrastructure vendors. For more information, go to www.KLASresearch.com, email mailto:marketing@klasresearch.com, or call 1-800-920-4109 to speak with a KLAS representative. Follow KLAS on Twitter at www.twitter.com/KLASresearch.

March 14, 2012 I Written By