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Allscripts (MDRX) Completes Sale of CarePort Health Business

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Zacks Equity Research
·3 min read
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Allscripts Healthcare Solution Inc. MDRX recently announced the completion of the previously-announced sale of CarePort business to WellSky Corporation on Dec 31, 2020, for an amount of $1.35 billion. On Oct 13, 2020, Allscripts entered into a definitive agreement with WellSky to sell its CarePort Health (“CarePort”) business – a leading care coordination software company that helps in the management of patient transitions through different settings of care.

For investors’ note, WellSky is a global healthcare software technology company with an objective to develop, implement and support clinical management marketed to healthcare industry.

The completion of the sale should boost Allscripts’ Population Health segment.

Significance of the Deal

The agreement is hugely beneficial for Allscripts with respect to delivering substantial value for its shareholders and providing the benefit of sustained investment under new and robust ownership to customers at CarePort. Further, this transaction will help Allscripts to boost its commitment toward its core business.


Following the closure of the deal, Allscripts anticipates to use the net after-tax proceeds from the sale for investment in its solutions, while deleveraging its balance sheet and supporting crucial share buybacks.

Another Notable Divestment

In October 2020, Allscripts announced the completion of the previously-announced sale of its EPSi business to Strata Decision Technology (Strata) for $365 million. Notably, on Jul 30, 2020, Allscripts entered into a definitive agreement with Strata to sell EPSi — a leading provider of decision support and planning tools for hospitals and health systems.

Industry Prospects

Per the report by Grand View Research, the global healthcare information technology (IT) market size was valued at $67.5 billion in 2019 and is expected to see a (CAGR) of 10.3% by 2027. Growing demand for preventive care owing to increase in chronic diseases globally coupled with a rise in funding for various healthcare start-ups is driving the market growth.

Price Performance

Shares of Allscripts have gained 47.9% in a year’s time compared with industry’s growth of 25.2%.

Zacks Rank and Key Picks

Currently, Allscripts carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space include Stryker Corporation SYK, Owens & Minor Inc. OMI and Quidel Corporation QDEL. While both Owens & Minor and Quidel sport a Zacks Rank #1 (Strong Buy), Stryker carries a Zacks Rank of 2 (Buy). You can see the complete list of Zacks #1 Rank stocks here.

Stryker has a projected long-term earnings growth rate of 9.6%.

Owens & Minor has an anticipated long-term earnings growth rate of 45.20%

Quidel has a projected long-term earnings growth rate of 25%.

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Stryker Corporation (SYK) : Free Stock Analysis Report
 
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