Healthcare IT News - October 2008 - (Page 55)

54 Healthcare IT News ■ October 2008 vENdoRS www.HealthcareITNews.com Misys seeks new funds after lehman letdown By BErNIE MoNEgaIN, Editor LONDON - Financial analysts who track healthcare technology companies Misys and Allscripts say Misys should have no problem obtaining the $305 million it needs to complete the planned merger with Allscripts. “The deal is going to get done,” said Sean Wieland, an analyst with Piper Jaffray. Bret Jones, an analyst with Leewink Swann LLC, agrees. Barclays likely would step in to provide the financing, he said. London-based Misys PLC announced in mid- September that it had postponed to October 6 a planned “extraordinary general meeting” to complete the merger of its Raleigh, N.C.-based healthcare unit with Chicago-based Allscripts because officials are unsure of the line of credit they had obtained from Lehman Brothers. Allscripts, too, delayed to October 6 its planned annual meeting with stockholders. Lehman Brothers declared Chapter 11 bankruptcy on September 15. Two days later, U.K. bank Barclays agreed to a $1.75 billion deal to buy Lehman’s core business. Both Weiland and Jones figure Barclays will take over the deals Lehman Brothers had in place with clients like Misys. Moreover, Misys has what one London analyst called an “ace in the pack” - its 26 percent shareholder ValueAct Capital, which is providing equity financing for the cash portion of the transaction. “We’re not talking a tremendous amount of money,” Jones said of the $305 million commitment from Lehman. Wieland does not view the merger as being at risk. “Allscripts, if they wanted to have backed out, they could have,” he said. Instead, the company issued a news release stating it would continue to support the merger. “While the events surrounding Lehman Brothers are unfortunate, we nevertheless remain excited about the transactions with Misys and believe they are in the best interests of our stockholders and clients,” said Allscripts CEO Glen Tullman. ■ More at HealthcareITNews.com e Connect: leHMaN 1008 ● INTEgraTE Continued from page 51 An event so amazing, you don’t have to be there to be there. And it’s all free. All the networking. All the education. All the exhibits. All at your desktop. All for free. The HIMSS Virtual Conference & Expo, created in partnership with Healthcare IT News, has grown to become one of our most anticipated events of the year. You and your staff can engage in educational sessions (our November themes are IT Leadership and Clinical Informatics), live Q&A and esteemed speakers. Visit a virtual exhibit hall, gather information on the latest breaking technology and chat with vendors. Interact live with other attendees. All at your desktop. All for FREE. Deluxe Exhibitors: Register now. It’s convenient. It’s free. It’s the HIMSS Virtual Conference & Expo. November 19-20, 2008 REGISTER FREE TODAY AT www.himssvirtual.org transforming healthcare through IT ™ wake of the merger, but few had forecast such a drastic number. Some said the move could make HP a leaner, meaner company that will hold up better in the long run. “What’s encouraging is that HP committed to reinvesting integration savings into its workforce … to ensure it has the global footprint it needs, sending an important message to customers concerned about how the reduction will affect their HP/EDS contracts,” said John Madden, principal analyst at global advisory and consulting firm Ovum. The merger was announced in May and completed in August, adding a reported 142,000 workers (47,000 in the United States) to HP’s 178,000-person payroll. The acquisition boosted HP to the world’s second largest provider of technology services, up from fifth and behind only IBM, and makes the company the world’s largest provider of applications management services. HP officials said they expect to save $1.8 billion a year from the cuts once the restructuring is complete, but that won’t be seen in the company’s net profits until 2010. In a conference call with analysts, HP Chief Financial Officer Cathie Lesjak said the company would take a $1.7 billion hit in the current quarter for a goodwill adjustment and other costs and will see its net income reduced by 17 to 19 cents a share in this quarter and six to 11 cents per share in the 2009 fiscal year. Ann Livermore, executive vice president of HP’s Technology Solutions Group, told analysts that the combined company will target the computer and technical services market, which she called “a market looking to be disrupted,” She said the company is positioned to help clients improve their IT alignments through virtualization and server automation, as well as data center operations. HP and EDS had a combined $38.9 billion in services revenue during the 2007 fiscal year. In contrast, IBM reported $51.4 billion in technology and business services revenue last year. “With some 30-plus acquisitions under its belt in the past three years, HP is treading on familiar ground,” said Madden. “Customers are eager to see whether HP’s execution matches its confidence for making this deal work. “ “Gunning for a dominant position in IT transformation is consistent with how HP has attempted to position and market its capabilities in the past year, and HP has expertise in all of its target areas,” he added. “But what was clear from Monday’s (Sept. 15) meeting is that it will take six to nine months for the first real signs of progress from the integration to emerge.” ■ More at HealthcareITNews.com e Connect: iNteGrate 1008 ● http://www.HealthcareITNews.com http://www.HealthcareITNews.com http://www.healthcareitnews.com/story.cms?id=10118 http://www.vha.com/contracting http://www.vha.com/contracting http://www.HealthcareITNews.com http://www.healthcareitnews.com/story.cms?id=10112 http://www.healthcareitnews.com/eConnect.cms?id=10149

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Healthcare IT News - October 2008 Contents Seattle's Slate Board 2.0 MGMA Newsmaker IT Battles Infection Beyond Adoption Excellence in Maine Carrot and Stick HP Layoffs Mobile Workstations Automating Offices

Healthcare IT News - October 2008

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