Amisys gets traded, again
September 14, 2006
While we wait a little longer for your comments on HP's boardroom blunder (keep those cards and letters coming folks), I'll turn for a bit to the world of migration and healthcare applications. AmisysSynertech, the owners of the Amisys/3000 customer base, have been acquired by a healthcare firm called DST.
The transaction, expected to close by the end of the fourth quarter, will be the fifth sale of Amisys since 1997 — moving from an independent company to a minor group at HBO, which merged with McKesson, then sold Amisys to Platinum Equity, which sold Amisys LLC to Whitney & Co. for an undisclosed amount in 2003. Now that Amisys has been paired with Synertech, that firm has been acquired by DST. Not bad for a company whose 3000 application customer base never reached more than 120 organizations.
Of note: The press release that unveiled the transaction also put a number on AmisysSyntertech revenues. The combined numbers — accounting for support fees for 3000 sites, sales and support of the new Amisys Advance replacement app, and oh yeah, all that hosting revenue from Synertech — came to $103.4 million for fiscal 2005 and $65.1 million for the seven months ended July 31, 2006. Amisys has approximately 1,400 employees located in three principal locations: Harrisburg, Pennsylvania; Rockville, Maryland; and Hyderabad, India.
What the acquisition means, for the 3000 customers who plan to migrate to Amisys Advance, remains to be seen. There are two kinds of acquiring companies: those who loot the assets to strenghten existing lines of business, and those who buy successful companies to offer and integrate a new line. DST has a DST Health Solutions wholly owned subsidiary, which will assimilate the Amisys staff and customers.
This is not the first time Amisys has been acquired by a publically traded company. DST said in its press release:
DST will fund the acquisition with available cash balances and existing credit facilities. The integrated business unit will operate as DST Health Solutions. On a pro-forma basis, the transaction is not expected to have a material impact on DST’s net income or earnings per share for 2006.
That's businesss-speak for "No matter what business Amsys does in the next quarter, we're too big to expect the revenues or profit to make much of a difference in our balance sheet and '06 report."
Reading tea leaves in the release will give migrating customers a chance to expand their purchase plans with Amisys and its new parent. "DST believes the expanded DST Health Solutions business will provide deeper product offerings to existing and new customers, as well as leverage DST’s AWD and Output Solutions products"
Last year DST acquired CSC's Health Plans Solutions business. The HPS applications were to "expand the DTS presence in the healthcare processing services industry, which currently uses DST's AWD and Output Solutions products."
DST is largely a computer services company, the market segment which produced all that revenue for Synertech. DST's market cap is $4.2 billion, about one-fourth the size of McKesson's. Amisys Synertech was privately held by part of the Whitney Group at the time of the sale.