WellSky announced Tuesday it has entered into an agreement to acquire CarePort Health from Allscripts Healthcare Solutions (Nasdaq: MDRX), a health care information technology provider. The deal is for $1.35 billion, according to Allscripts.
WellSky is an international software and professional services company with clients that include home health providers, hospital systems, blood banks, labs, hospices, government agencies and human services organizations. The company is jointly owned by private equity firms TPG Capital and Leonard Green & Partners, which teamed up with WellSky this July.
Boston-based CarePort is a care coordination software company that connects health care providers and payers, an increasingly important function as Medicare Advantage enrollment continues to soar and as the U.S. health care system steadily shifts away from fee-for-service models.
Currently, CarePort serves 1,000 hospitals and health systems, plus 110,000 post-acute provider locations.
CarePort was an attractive acquisition target for WellSky because of the natural alignment between both organizations, Bill Miller, CEO of WellSky, told Home Health Care News in an email.
“WellSky is committed to investing in care coordination and interoperability solutions, and CarePort was the obvious choice — based on its superior technology, market leadership and national presence,” Miller said. “We’ve been impressed with CarePort’s proven track record as the leading post-acute care coordination platform in the U.S.”
CarePort’s $1.35 billion price tag represents more than 13 times the company’s revenue over the past 12 months. It’s also roughly 21 times CarePort’s non-GAAP adjusted EBITDA over the trailing 12 months
As part of the deal, CarePort’s customers and more than 200 employees will join WellSky.
“This agreement is another all-around win for Allscripts, as it unlocks significant value for our shareholders, enables us to increase our focus on our core business and brings our CarePort customers the benefit of continued investment under new and very strong ownership,” Rick Poulton, Allscripts president and CFO, said in the press release announcing the news.
For WellSky, the planned purchase of CarePort allows the company to better manage the acute care discharge process, as well as keep track of patients across post-acute care settings, including home health care.
Additionally, the deal will allow home health providers to streamline their referral management and intake processes, according to Miller.
“CarePort’s EHR-agnostic platform allows home health providers to effectively coordinate patient care through real-time collaboration with hospitals, health systems, ACOs, and other post-acute providers to close gaps in care and improve patient outcomes,” he said. “This collaboration has the potential to create a meaningful, measurable difference for patients, providers and payers across even more care settings.”
Overall, CarePort represents about 6% of Allscripts consolidated revenues. Allscripts reported Q2 2020 revenues of $406 million in July.
The sale is slated to close before the end of the year, subject to clearing customary regulatory hurdles. WellSky and CarePort will continue to operate independently prior to that time.
“Joining WellSky means that we can increase vital connections between acute, post-acute and community care providers to make a meaningful difference in the lives of more patients in more places,” Dr. Lissy Hu, CEO of CarePort, said in the press release.
WellSky’s plan to acquire CarePort is closely in line with leadership remarks following the news about Leonard Green & Partners. At the time, WellSky noted the new investment would help it expand current capabilities and service offerings, particularly when it comes to analytics, telehealth and payer relationships.