By Zeba Siddiqui
Wed Dec 19, 2012 10:52pm EST
(Reuters) – Embattled medical record organisation Allscripts named a house member and former arch handling officer of opposition Cerner Corp Paul Black as a CEO, replacing Glen Tullman, and pronounced it finished a examination of vital alternatives.
The move, effective immediately, raises new questions for a instruction of Allscripts Healthcare Solutions Inc after romantic shareholder HealthCor Management commissioned 3 of a nominees to a company’s house final summer, following a sour quarrel with Tullman.
Allscripts has struggled to boost new business following a merger of Eclipsys Corp in 2010. It had hoped to enhance into program and apparatus for hospitals and medical systems with that squeeze though finished adult losing business to Cerner Corp and closely hold Epic Systems Corp.
The company, that has been a theme of takeover interest, also pronounced on Wednesday that Lee Shapiro would step down as president.
Allscripts shares, that have scarcely halved in value this year, were down 19 percent during $8.70 in extended trade on Wednesday. They had sealed during $10.68 progressing on a Nasdaq.
“Both Glen and a house of directors trust that after Glen’s 15 years of leadership, it is a right time now for a new personality to concentration on execution, position a association to broach shareholder value and lead Allscripts by a subsequent proviso of growth,” Allscripts mouthpiece Ariana Nikitas said.
Tullman’s abdication comes months after Healthcor cited problems with his care and demanded his ouster.
“I cruise Glen has been underneath a lot of vigour given a attempted manoeuvre by former house members and HealthCor demanded some changes and Allscripts concluded to put some of HealthCor’s appointees on a board,” pronounced Anthony Vendetti, an researcher during Maxim Group, adding he has privately famous Tullman given he became CEO.
Black left Cerner in 2007 after some-more than 12 years with a company, assisting to make it a marketplace personality with some-more than $1.5 billion of annual revenues and personification an instrumental purpose in a double-digit organic growth, Allscripts said.
“I cruise (Black) is a ideal claimant for CEO,” pronounced Vendetti, who has a “buy” rating on Allscripts batch and a cost aim of $15.
“We perspective this news definitely as Mr. Black is good regarded in a industry. With that said, we say a neutral rating for a time being,” Steven Halper of Lazard Capital Markets wrote in a note.
LONG ROAD TO GROWTH
Allscripts batch has depressed some-more than 42 percent this year amid diseased bookings that hampered sales and profit.
The association withdrew a full-year opinion in November, as it began to cruise vital alternatives. Later that month, Reuters reported that Blackstone Group LP had emerged as a frontrunner to buy a association though that a dual sides were distant detached on cost and a understanding was rarely uncertain, according to people informed with a matter.
Black is no foreigner to a buyout industry, carrying served as handling executive of Genstar Capital LLC, a private equity firm, and comparison confidant during New Mountain Finance Corporation, an investment government company.
His credentials might come in accessible as he seeks to spin around a company’s financial opening in a formidable sourroundings for medical IT firms. These companies face a shrinking patron bottom as hospitals connect medicine practices into their existent vendors.
“The expectancy is that it will take some time (for a company) to essentially spin around a business,” researcher Vendetti said. He combined that Allscripts’ categorical idea should be to reinstate customer trust in their products and a ability to confederate their product portfolio.
A criticism in a Allscripts matter from Tullman, who had been CEO given 1997, done no anxiety to a reasons for his departure. He pronounced he was assured that Allscripts was in good hands and had a splendid destiny ahead.
Analyst Halper pronounced he remained endangered about a long-term expansion prospects of a company.
“With a preference of Paul Black, hopefully a association can redefine a vital direction,” Halper said.
(Additional stating by Ransdell Pierson and Greg Roumeliotis in New York; Editing by Gary Hill, Saumyadeb Chakrabarty and Muralikumar Anantharaman)