Health IT vendor Greenway Medical Technologies has agreed to be taken private by investment firm Vista Equity Partners for $644 million. The deal, which comes less than two years after the company went public, will roll up Greenway with Vitera Healthcare Solutions LLC, a privately-held EMR vendor which is owned by Vista Equity, Reuters reports.
Vista has agreed to pay $20.35 per Greenway share, about 19 percent more than the stock’s Tuesday close of $17.13 on the New York Stock Exchange. The price is more than the Greenway shares have seen through its existence as a public company. (According to Reuters, the shares saw a lifetime high of $19.44 in November.)
Greenway has said that stockholders owning about 50.9 percent of its shares have agreed to tender in their holdings and vote to push the deal through. All of Greenway’s directors and some of its executive officers have also agreed to do so, according to the Reuters report.
Vista must have seen tremendous value in hooking up Vitera with Greenway. After all, it’s willing to take on a financially wobbly company that lost $5.1 million in its 2013 fiscal year ending June 30 and pay a premium for it. Although Greenway has regularly commented that many of their revenue issues stem from their move to a monthly revenue model.
If nothing else, the deal bulks up both sides to a level that can only help during an era of EMR consolidation. According to the two companies, the combined entity will serve almost 13,000 medical organizations and 100,000 providers. The new health IT company will be marketed under the Greenway brand.
This transaction made me think about a recent post by my colleague John Lynn regarding the status of the EMR vendor marketplace. It’s his view that we’re past the “Golden Age of EHR Adoption” and that things will be tougher for vendors than ever before. Assuming he’s right — and his thesis is pretty hard to argue — we should see a lot more consolidation deals taking place in the near future.