New Allscripts CEO Eyes Acquisitions

Allscripts Healthcare Solutions on Thursday reported second-quarter revenue growth of nearly 7% year-over-year as it continues to refocus its business on its payers and life sciences unit, Veradigm.

In May, Chicago-based Allscripts sold its Hospitals and Large Practices segment, which included various electronic medical records and revenue management products, to Canadian software company Constellation Software. The division accounted for $927.6 million of Allscripts’ $1.5 billion in 2021 revenue, but the division’s revenue was down from a year earlier. Veradigm’s 2021 revenue was $552.2 million, up 4.6% from 2020.

Allscripts said it will use the proceeds from the share sale to buy back and acquire shares to support Veradigm.

Allscripts is considering acquisitions that will expand the company’s payer and life sciences operations “to balance out what we still have vendor-focused,” Allscripts CEO Rick Poulton said Thursday in a call with investment analysts. This “would be strategically important to me.”

Poulton took over Allscripts in early May after the company’s CEO Paul Black, who has led Allscripts since 2012, stepped down.

Veradigm, a division of Allscripts created in 2018 to sell data and analytics tools that connect service providers with payers and life sciences companies, is expanding its products for health insurers and service providers in areas such as risk analysis and reporting, identifying gaps in care and filing claims. Poulton said.

The division has approximately 80,000 physician clients who use its clinical, financial and patient engagement products.

Allscripts reported $150.9 million in revenue for the second quarter of 2022, up 6.9% year-over-year. Veradigm’s revenue was $144.6 million, up 8.4% year-over-year.

The company reported an operating loss of $5.4 million for the quarter, compared to a $16.8 million operating profit a year ago.

Allscripts posted a net loss of $64.1 million compared to a net income of $21.9 million in the second quarter of last year.

The results included transaction costs of $21 million. According to Chief Financial Officer Leah Jones, the company posted a $67.3 million after-tax loss as a result of the sale of its hospitals division and major medical practices due to legal fees and tax regulations.

Verdigm’s operating income was $24 million, up 33.3%.

Allscripts on Thursday reiterated its previous earnings forecast for 2022, forecasting Veradigm’s revenue to grow by 6-7%.

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