- Allscripts will sell its joint venture stake in behavioral health EHR company Netsmart after 2 years of owning about 50 percent of the company, according to Allscripts President Rick Poulton in a recent earnings call with investors.
Allscripts executives took steps to sell stake in Netsmart during the second financial quarter.
“Seizing on the momentum that we’ve created at Netsmart, during the quarter we took further steps to unlock value for shareholders through monetizing our investment in Netsmart,” said Poulton. “After researching and assessing several possible alternatives, we began detailed negotiations with multiple partners on the sale of our interest.”
Allscripts management expects to complete the sale of its Netsmart stake in the third quarter of 2018. If Allscripts successfully closes the sale, the health IT company will end a two-year relationship with Netsmart.
Allscripts purchased nearly all of Netsmart for $950 million in 2016 in a joint venture with private equity investor GI Partners. As part of the joint venture, Allscripts and GI Partners each owned about 50 percent of Netsmart.
“Obviously to the extent we conclude a transaction, we will cease to consolidate Netsmart in our financial results,” noted Poulton.
“We have signed a letter of intent and buyer diligence currently continues,” added Poulton.
In 2018, Netsmart launched a new cloud-based EHR system offering — MyUnity — specifically designed to meet the needs of home health and senior living care providers. MyUnity gained more than 40 new users in the post-acute care market over the last few months, according to Poulton.
Netsmart acquired home health IT solutions from Change Healthcare and cloud-based software company HomeCare Accounting Solutions (HAS) in 2018. Netsmart’s deal with Change Healthcare closed in the second quarter and bulked up Netsmart’s health IT offerings with two new home health and hospice IT solutions.
Allscripts also noted in the earnings call that its Practice Fusion EHR solution has seen continued growth in new users since switching to a subscription-based payment model.
“Practice Fusion has achieved several tens of thousands of subscriptions signups, and overall has exceeded our expectations,” said Poulton.
Allscripts acquired Practice Fusion in a $100 million cash deal in January.
Practice Fusion was a free EHR system software for users until June 1, when Allscripts implemented a $100 per physician per month subscription fee.