Allscripts considers buyout offers

Blackstone, Carlyle and Silver Lake are among the bidders for this electronic health records company.

By Minyanville.com Oct 8, 2012 3:39PM
Image, Pills, by Sean Justice of CorbisAfter announcing late last month that it is contemplating selling itself, Allscripts Healthcare Solutions (MDRX) has received first-round leveraged buyout bids from private equity groups such as Blackstone Group (BX), Carlyle Group (CG), and Silver Lake Management, reports Bloomberg News. The stock is trading higher as a result. 
 
The electronic health-records provider, which has retained Citigroup (C) as its advisor on the sale, now wants second-round offers in the next three to four weeks, sources told Bloomberg.
 
Allscripts has had a troubled year. After the company fired chairman Phil Pead in April, three directors also left with Pead in protest. Allscripts then faced a proxy battle with major shareholder, hedge fund Healthcor Management, which eventually placed three of its candidates on Allscript’s board in June.
 
Leo Carpio, an analyst at Caris & Co in New York, noted on October 1 that Allscripts may have felt greater pressure to sell after it lost out on a $302 million contract to manage the record systems for New York City public hospitals.
 
In the past week, a slew of analysts covering Allscripts have revised their targets on shares of the company. ISI Group moved Allscripts to Overweight from Buy and upped its price target to $14.50 from $11.50. Analysts at Cowen moved the company to Outperform from Neutral, while those at Robert W. Baird raised their target from $15 to $17.
 
Sterne Agee, which has a Buy rating on Allscripts, also lifted its price target to $15 from $13.50, saying in a note, "Our analysis suggests a $15-$19 valuation range for MDRX shares should a go-private transaction be consummated by year-end. At the low end, this valuation range is 20% above today’s closing price, while the top end implies 50% upside. As such, we have raised our price target to $15 per share from $13.50."
 
Shares of Allscripts were down 29.62% year to date before Monday’s open.


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