News | March 18, 2008

Allscripts, Misys Healthcare Sign Merger Agreement

March 19, 2008 - Clinical software providers Allscripts and Misys Healthcare LLC yesterday signed a definitive merger agreement, which is expected to significantly enhance Allscripts position in the overall healthcare information technology sector, especially in the electronic health records (EHR) and practice management (PM) markets.

The combined company will have a client base of approximately 150,000 U.S. physicians and 700 hospitals. The combined company, which will have more than 3,700 employees, will be headquartered in Chicago.

"This agreement changes the landscape in healthcare information technology by creating a single company that will serve roughly 150,000 physicians with our portfolio of electronic health record, practice management and other software solutions," said Glen Tullman, CEO of Allscripts. "Improving U.S. healthcare requires the ability to connect all stakeholders through the continuum of care, and today we have taken a major step towards doing that, with nearly one out of three physicians in America as customers of the combined company."

Under the terms of the agreement, which has been approved by the board of directors of both companies, Misys Healthcare will be merged with a wholly-owned subsidiary of Allscripts, and Misys Plc will contribute $330 million in cash to Allscripts, for which it will receive shares representing a 54.5 percent ownership position in the combined company. Allscripts will pay a special cash dividend of $330 million, or approximately $4.90 per share, to Allscripts stockholders of record as of the last business day immediately prior to the closing of the transaction. Allscripts stockholders will retain the shares they currently own.

In its 2007 fiscal year, which encompasses the period from June 1, 2006 to May 31, 2007, Misys Healthcare had revenues of about $376 million, and profit before exceptional items of about $39.5 million.

The combined company expects to achieve annual pre-tax cost synergies of $15 to $20 million in the first full year following the close of the transaction, increasing to total annual cost synergies of $25 to $30 million in the years that follow. The company also expects revenue synergies through cross-selling each company�s product offering into each other's customer base.

The current Allscripts management team will continue in their management roles at the combined company. Glen Tullman will serve as CEO, and Bill Davis, chief financial officer of Allscripts, will serve as CFO. Mike Lawrie, chief executive of Misys, will serve as executive chairman of the Board of Directors. The new board will have 10 members, including Lawrie, Tullman, five directors nominated by Misys and three directors nominated by Allscripts.

"In Allscripts, we have found the perfect partner to complement and drive our business and position us to deliver superior value to our shareholders, clients and employees over the long term," said Misys CEO Mike Lawrie. "We have great respect for the Allscripts team and share highly compatible cultures. The employees of both companies will enjoy the benefits of being part of a clear industry leader with a broader suite of products that meet the individual needs of all practice sizes and specialties."

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