Allscripts Healthcare Solutions Inc. (MDRX), the electronic health-records company considering a leveraged buyout, received first-round bids from private-equity firms including Blackstone Group LP (BX), Carlyle Group LP (CG) and Silver Lake Management LLC, people familiar with the talks said.
The company, looking to be taken private after a board shakeup and a legal fight with its second-biggest shareholder this year, wants second-round offers within three to four weeks, said the people, who asked to remain anonymous because the discussions are private. Allscripts, which is using Citigroup Inc. to run the sales process, has been interviewing other banks to add a second financial adviser, said one of the people.
Allscripts has struggled to increase new business following its 2010 acquisition of Eclipsys Corp., and in April, the Chicago-based company fired Chairman Phil Pead and saw three directors leave with him in protest. Loss of a bid last month to manage records systems for New York City public hospitals also may have increased pressure for a sale, Leo Carpio, an analyst at Caris & Co. in New York, said Oct. 1.
Peter Rose, a spokesman for Blackstone, and Chris Ullman, a Carlyle spokesman, declined to comment. Gemma Hart also declined to comment for Silver Lake, as did Ariana Nikitas, an Allscripts spokeswoman.
The company may fetch $15 in a sale, according to Bret Jones, an analyst at Oppenheimer & Co. in New York. Its shares rose 5 percent to $13.99 at 9:32 a.m. New York time, giving the company a market value of about $2.4 billion.
HealthCor Management LP, which held 7.4 percent of the common stock outstanding as of June 30, sued Allscripts in May after the board shakeup. New York-based HealthCor dropped the lawsuit a month later when Allscripts agreed to nominate three independent directors to the board.
New York Contract
Allscripts lost a bid for a $302 million contract to supply its technology to New York City’s public hospitals on Sept. 27. The next day, Bloomberg News reported that the company had hired Citigroup Inc. to advise it in talks with private equity buyers.
Allscripts is the worst performer of 33 companies in the Standard and Poor’s Midcap Health Care Index this year, falling 30 percent. It climbed 14 percent Sept. 28 after Bloomberg News reported the possibility of a sale.
Some of Allscripts’ challenges date to its acquisition of Eclipsys, which brought Pead and two other directors to the board. The company, which specialized in records systems for doctors’ offices, bought Eclipsys to help expand into software and equipment for hospitals and health-care systems. President Barack Obama’s 2009 economic stimulus law made available as much as $27.4 billion to help hospitals and physician practices buy new equipment to collect and share medical records.
Instead, Allscripts said in April that customers had “delayed commitments as they wait for us to introduce new releases and demonstrate more robust integration” of Eclipsys.
New York City Health and Hospitals Corp.’s board voted Sept. 27 to authorize the agency to negotiate a contract worth as much as $302 million with Epic Systems Corp. of Verona, Wisconsin. Closely held Epic will install its systems in the city’s 11 public hospitals and more than 70 community health clinics.
This article originally appeared in the October 8, 2012 edition of Bloomberg.