Intuit (NASDAQ:INTU)
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Intuit Inc. (INTU) said on Monday it was buying a privately held company that makes healthcare-related software for $91 million, a move that expands the personal-finance software maker's business in healthcare products.
The all-cash deal to buy Medfusion Inc., which delivers its services over the Internet, is expected to close during the fourth quarter of Intuit's fiscal year 2010, which ends July 31.
The deal points to the growing appeal of the software-as-a-service business model, which allows for metered use of applications rather than the sale of a computer program that is run from a local computer. More than 95% of organizations expect to maintain or increase their use of software as a service, which is also known as SaaS, according to data tracker Gartner Inc.
The acquisition also points to the software industry's increasing interest in healthcare. Amid an overhaul of the healthcare system, many observers have pointed to software as a way to cut costs and improve quality.
Medfusion makes electronic health-record software and software that lets patients communicate online with doctors, clinics and other healthcare providers to schedule appointments, pay bills, request prescription refills, fill in medical forms and review lab results.
Mountain View, Calif.-based Intuit said it expects the acquisition will be dilutive to fiscal year 2010 GAAP and non-GAAP diluted earnings per share by approximately 1 cent. It does not, however, expect the acquisition to have a material effect on fiscal year 2011 earnings.
Medfusion will be Intuit's third healthcare-related product. In 2005, Intuit's Quicken Health division developed Intuit Expense Manager, a product that helps consumers make sense of their medical bills. And last year Quicken Health launched Expense Tracker, which in part lets consumers pay their healthcare bills over the Internet.
According to Intuit, software from Cary, N.C.-based-Medfusion will eventually be integrated into Intuit's other healthcare offerings. When the transaction closes, Medfusion's Founder and Chief Executive Officer Stephen Malik will become a senior vice president and general manager reporting at Intuit and will lead the company's healthcare business.
Intuit stock was down slightly by 0.7% at $35.47 in after-hours trading.
-By Jeanette Borzo, Dow Jones Newswires; 415 765 8230; jeanette.borzo@dowjones.com