Allscripts Purchases Eclipsys in a Major Deal in the EMR Market

Allscripts (Chicago, IL, USA), a leader in the physician electronic medical record (EMR) market, has purchased rival Eclipsys (Atlanta, GA), in an all-stock deal valued at about US$1.3 billion, in what is seen as a plausible attempt to unite the EMR market.

The Allscripts EMR software is primarily directed towards physicians' practices and post-acute organizations, claiming 180,000 physician clients. The Eclipsys purchase adds almost 1,500 hospital and nearly 10,000 nursing and other healthcare facilities customers. The combined company still faces several challenges, including the blending of their software offerings, as well as competition from other major EMR companies such as McKesson, Cerner (Kansas, MO, USA), and GE Healthcare. Allscripts CEO Glen Tullman will serve as CEO of the combined company, while Eclipsys' President and CEO Phil Pead will take the chairman's title. The combined company will have 5,500 employees.

"It's logical to match these companies up since Allscripts has physicians and Eclipsys reaches into hospitals and health systems market,” said Bruce Carlson, Publisher of Kalorama Information (New York, NY, USA). "Despite Allscript's name recognition in the physician market, it would have been hard for any company to maintain leadership in EMR without reaching into the hospital space as well. It's not easy to break into the hospital EMR market, so an acquisition was the logical play here.”

The combined company will be better positioned to win access to the $30 billion of stimulus federal funds designated for the adoption of electronic healthcare records, an incentive created by the Obama administration to induce doctors and hospitals to move to electronic recordkeeping, with subsidies available from 2011.

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