Allscripts Healthcare Solutions is selling its care coordination subsidiary CarePort Health to WellSky, the companies said Tuesday.
WellSky, a company that develops software tools for post-acute care providers, has entered into a definitive agreement to acquire CarePort for $1.35 billion, representing more than 13 times CarePort’s revenue over the last 12 months and roughly 21 times the company’s adjusted earnings before interest, taxes and amortization.
CarePort represents roughly 6% of Allscripts’ revenue.
Allscripts and WellSky, which is owned by private-equity firms TPG Capital and Leonard Green & Partners, expect the sale to close before year-end.
WellSky officials said buying CarePort, which connects acute and post-acute care providers and payers, will better position the company to manage the acute-care discharge process, as well as tracking for patients across post-acute care settings.
Under the agreement, CarePort’s customers and employees will transition to WellSky.
“Together with CarePort, WellSky will establish new, meaningful connections between historically disparate settings of care,” Bill Miller, CEO of WellSky, said in a statement.
Rick Poulton, Allscripts’ president and chief financial officer, said the sale for Allscripts “unlocks significant value for our shareholders” and “enables us to increase our focus on our core business.”
Allscripts will use proceeds from the sale to “invest in its solutions, further deleverage the company’s balance sheet and support significant share repurchases,” according to a news release.
Allscripts in July announced plans to sell EPSi, a business unit focused on financial decision support, to Strata Decision Technology for $365 million.
At the time, Poulton acknowledged that Allscripts could continue to divest businesses in its data analytics and care coordination segment—the segment that houses CarePort—since they tend to do more business outside the Allscripts EHR customer base. “We’re not predicting or foreshadowing anything, but they certainly are possibilities,” he told investment analysts in July.
Allscripts posted $406.2 million in revenue for this year’s second quarter, down 8.6% from the year-ago quarter, which executives attributed to lower patient volumes linked with the COVID-19 pandemic. The company reported an operating loss of $4.7 million, down from a reported $4.7 million in operating income in the year-ago quarter.
The company in May withdrew its full-year 2020 financial outlook due to uncertainty from the pandemic.