Bidding Starts for Allscripts (MDRX, BX, CG)
Electronic health-records provider Allscripts Healthcare Solutions Inc. (NASDAQ: MDRX) said late last month that it would explore a sale of the company. Bloomberg is reporting this morning that private equity firms Blackstone Group LP (NYSE: BX), Carlyle Group LP (NASDAQ: CG) and privately held Silver Lake Management have all made first round bids on the company.
Allscripts has had a turbulent year. In April the company fired its chairman (and former CEO), the CFO resigned and three directors left -- all on the same day. The impetus for the move came from a major shareholder, Healthcor Management, which placed three of its candidates on the board following the massacre.
Shares of Allscripts fell below $10 that day, and have managed to come back to north of $13 as of last Friday. At least one analyst put a target price of $15 on Allscripts the day it announced it would explore a sale of the company. Before the April disaster, the stock was trading at $16 and the 52-week high is over $21 a share. The trailing P/E is nearly 43, but the forward P/E is just over 14. The consensus target price is just $12.62.
The move to electronic health records under Obamacare makes Allscripts a valuable property. Just guessing here, but a buyout at $15 looks too cheap. And this company almost certainly will go to the highest bidder.
Shares of Allscripts closed at $13.33 on Friday, in a 52-week range of $8.84 to $21.66. Shares are up 5.8% in premarket trading this morning, at $14.10.