Quality Systems, Inc. has announced it will acquire San Diego-based HealthFusion, a cloud-based software for physicians, hospitals and medical billing services for $165 million plus potential additional contingent consideration of up to $25 million. The contingency for full payment of the earn-out is based on the revenue target of $43 million of HealthFusion product revenues during calendar 2016. The transaction is subject to customary closing conditions and is expected to be completed during the Company’s current fiscal year, which ends March 31, 2016.
Founded in 1998 by three entrepreneurs including two primary care physicians, San Diego, Calif.-based HealthFusion supports over 6,000 ambulatory subscribers in more than 30 specialties spread across all 50 states and employs 140. HealthFusion’s 100 percent cloud-based MediTouch® platform is currently used by over 3,000 physician practices, hospital ambulatory centers and medical billing services (totaling more than 6,000 subscribers). All MediTouch modules function seamlessly together including the EHR, medical billing, practice management, collections, patient portal, and clearinghouse.
The Company has secured $200 million in fully committed financing from J.P. Morgan and U.S. Bank. At closing of the transaction, the Company expects to fund approximately $115 million of the consideration via this credit facility and the remainder through excess cash on hand.
“HealthFusion brings an extremely intuitive, fully mobile, cloud-based solution that affords smaller groups of physicians and other providers a clean EHR experience within a fully integrated suite of solutions for their practice. Over time, we will focus on expanding the platform to satisfy the needs of practices of increasing size and complexity. We will also look to provide some of our broader service capabilities to the HealthFusion client base,” said Rusty Frantz, president and chief executive officer at Quality Systems, Inc.
Last month, Quality Systems, Inc. sold the Hospital Solutions Division of its NextGen Healthcare subsidiary to QuadraMed Affinity Corporation (“QuadraMed”), which is part of the Harris Operating Group of Constellation Software Inc. for an undisclosed sum.
