Acquisition to accelerate cloud-based
development and delivery of QSI/NextGen Healthcare core
applications and elevate commitment to ambulatory services sector
with addition of clients
Quality Systems, Inc. (NASDAQ: QSII), announced today an
agreement to acquire HealthFusion Holdings, Inc. (HealthFusion) for
$165 million plus potential additional contingent consideration of
up to $25 million.
Based in San Diego, Calif., HealthFusion is a privately held
developer of web-based, cloud computing software for physicians,
hospitals and medical billing services. HealthFusion’s 100 percent
cloud-based MediTouch® platform is currently used by over 3,000
physician practices, hospital ambulatory centers and medical
billing services (totaling more than 6,000 subscribers). The
company has historically achieved meaningful double-digit annual
revenue growth rates, with a recent annualized revenue pace
exceeding $30 million. The contingency for full payment of the
earn-out is based on the generation of $43 million of HealthFusion
product revenues during calendar 2016.
The transaction is subject to customary closing conditions and
is expected to be completed during the Company’s current fiscal
year, which ends March 31, 2016. Quality Systems expects this
transaction to be accretive to its non-GAAP earnings in the first
full year following the acquisition.
The Company has secured $200 million in fully committed
financing from J.P. Morgan and U.S. Bank. At closing of the
transaction, the Company expects to fund approximately $115 million
of the consideration via this credit facility and the remainder
through excess cash on hand.
“The acquisition of HealthFusion is another example of our
strategy to expand both client base and solution capabilities in
our ambulatory market. We look forward to sharing this acquisition
as a part of our broader strategy with our client base at our
annual User Group Meeting in Las Vegas starting this Sunday,
November 1,” said Rusty Frantz, president and chief executive
officer at Quality Systems, Inc.
“HealthFusion brings an extremely intuitive, fully mobile,
cloud-based solution that affords smaller groups of physicians and
other providers a clean EHR experience within a fully integrated
suite of solutions for their practice. Over time, we will focus on
expanding the platform to satisfy the needs of practices of
increasing size and complexity. We will also look to provide some
of our broader service capabilities to the HealthFusion client
base,” Frantz explained.
Dr. Sol Lizerbram, HealthFusion chairman, added: “We believe our
SaaS-based healthcare technology products will prove beneficial to
Quality Systems’ NextGen Healthcare service offering as the Company
advances its cloud solutions capabilities. This acquisition
presents significant opportunity to capitalize on the joint
successes both companies have achieved to date in the ambulatory
market segment.”
J.P. Morgan Securities LLC is acting as financial advisor and
Latham & Watkins LLP is serving as legal counsel to Quality
Systems. TripleTree is acting as exclusive financial advisor and
Wilson Sonsini Goodrich & Rosati is serving as legal counsel to
HealthFusion.
Conference Call
Quality Systems will host a conference call for the investment
community to further discuss the transaction on Monday, November 2,
2015 at 8:00 AM Eastern Time (5:00 AM PT). All participants should
dial 1-866-900-9499 at least ten minutes prior to the start of the
call and reference conference ID #72447171. International callers
should dial 1-937-502-2136. To hear a live Web simulcast or to
listen to the archived webcast following completion of the call,
please visit the Company’s website at www.qsii.com, click on the
"Investors” tab, then select "Conference Calls," to access the link
to the call. To listen to a telephone replay of the conference
call, please dial 800-585-8367 or 404-537-3406 and enter conference
ID #72447171. The replay will be available from approximately 11:00
AM ET on Monday, November 2, 2015, through 11:59 PM ET on Monday,
November 9, 2015.
About HealthFusion
Founded in 1998 by three entrepreneurs including two primary
care physicians, San Diego, Calif.-based HealthFusion supports over
6,000 ambulatory subscribers in more than 30 specialties spread
across all 50 states and employs 140. HealthFusion develops
web-based, cloud computing software for physicians, hospitals and
medical billing services. HealthFusion’s fully integrated solution
includes MediTouch EHR (Electronic Health Record and Patient
Portal) and MediTouch PM (Practice Management and Claims
Clearinghouse).
MediTouch EHR was designed for use on mobile tablets such as the
iPad, and offers a unique array of features that facilitate
adoption of EHR technology. Each integrated module of the MediTouch
platform natively supports the iPAD® and the company is a certified
Apple Developer. All MediTouch modules function seamlessly together
including the EHR, medical billing, practice management,
collections, patient portal, and clearinghouse.
To learn more visit HealthFusion.com or follow HealthFusion on
Facebook, Twitter and YouTube.
About Quality Systems, Inc.
Irvine, Calif.-based Quality Systems, Inc. and its NextGen
Healthcare subsidiary develop and market computer-based practice
management, electronic health records and revenue cycle management
applications as well as connectivity products and services for
medical and dental group practices. Visit www.qsii.com and
www.nextgen.com for additional information.
Certain statements in this news release are forward-looking
statements within the meaning of the federal securities laws,
including but not limited to those related to the projected closing
date of the transaction, the outlook and anticipated financial
performance of HealthFusion, the Company’s intended sources of
funding for the acquisition, the anticipated accretive nature of
the transaction to the Company and the growth prospects for
HealthFusion and the Company. These forward-looking statements may
contain the words “believe,” “anticipate,” “continue,” “expect,”
“plan,” “potential,” “predict,” “estimate,” “outlook,” “project,”
“will be,” “will continue,” “will likely result,” or other similar
words and phrases. Risks and uncertainties exist that may cause
results to differ materially from those set forth in these
forward-looking statements. Factors that could cause the
anticipated results to differ from those described in the
forward-looking statements include, but are not limited to, the
ability to obtain required regulatory approvals for the
transaction, market and financial conditions which may impact the
financial performance of HealthFusion and general economic
conditions as well as those risks set forth in the Company’s public
filings with the U.S. Securities and Exchange Commission, including
the discussion under the heading "Risk Factors" in the Company’s
most recent Annual Report on Form 10-K and any subsequent Quarterly
Reports on Form 10-Q. The Company expressly disclaims any intent or
obligation to update these forward-looking statements except as
required by law.
© 2015 Quality Systems, Inc., Irvine, CA 92612® Marks owned by
Quality Systems, Inc.All other non-QSI Marks are the property of
their respective owners
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version on businesswire.com: http://www.businesswire.com/news/home/20151030006051/en/
For Media and Public Relations Inquiries
Contact:NextGen HealthcareMichelle Rovner,
215-657-7010mrovner@nextgen.comorFor Investor Relations
Inquiries Contact:Quality Systems, Inc.Susan J. Lewis,
954-389-3700slewis@qsii.comorJohn Stumpf, 949-255-2600Interim
CFOjstumpf@qsii.com
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