Allscripts Healthcare Solutions Inc., a provider of electronic health records, climbed as much as 6.3 percent on the possibility the company will sell itself to a private equity buyer.
Allscripts gained 5.5 percent to $13.10 at 9:37 a.m. New York time. The shares of the Chicago-based company rose 14 percent on Sept. 28 after Bloomberg News, citing people familiar with the matter, reported that Citigroup Inc. was hired by Allscripts to explore a sale.
Allscripts is holding talks about a potential leveraged buyout and spoken in recent weeks with firms such as Blackstone Group LP, said one of the people, who asked to remain anonymous because the talks are private. A leveraged buyout would make sense, wrote David Windley, an analyst for Jefferies & Co. in Nashville, Tennessee, in a note to clients.
“We cannot debate the logic,” as Allscripts “continues to climb a steep product integration hill that would be more comfortable out of the public eye,” said Windley, who has a hold rating on Allscripts.
No deal is imminent and Allscripts, which first offered public shares in 1999, may decide not to sell, said the people. Ariana Nikitas, Allscripts’ director of public relations, said in a Sept. 28 e-mail that the company doesn’t comment on rumors or speculation. A Blackstone spokesman, Peter Rose, declined to comment.
Allscripts acquired the rival Eclipsys Corp. in 2010 to take advantage of a 2009 law signed by U.S. President Barack Obama that offered hospitals and doctors $27 billion in incentives to install electronic records systems. On April 26, the company fired Chairman Phil Pead, who had joined the board as a result of Eclipsys purchase, and three directors resigned.
Allscripts on April 30 said it had hired Dennis Chookaszian to replace Pead. The same day, a major shareholder, hedge fund sponsor HealthCor Management LP of New York, called for Allscripts Chief Executive Officer Glen Tullman to be fired.