Mobile, AL-based CPSI, a provider of healthcare information solutions to rural and community hospitals, today announced it will acquire Healthland for $250 million, payable approximately 65% in cash and 35% in CPSI common stock. Under terms of the acquisition, CPSI will also acquire Healthland’s affiliates, Healthland Inc., American HealthTech, Inc. and Rycan Technologies, Inc.
The acquisition will further strengthen CPSI’s position in providing healthcare information systems to community healthcare organizations with approximately 1,200 combined hospital customers. Additionally, CPSI also announced the expansion of its senior management team to lead the Company going forward.
Minneapolis, MN-based Healthland provides 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.
Continued Support for Healthland’s Core Platforms
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.
Transaction Summary
The combined company is projected to have annual revenues of approximately $300M 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.
To finance the acquisition, 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.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.
