Quality Systems announced its intention to acquire HealthFusion Holdings for $165 million plus potential additional contingent consideration of up to $25 million.
Based in San Diego, Calif., HealthFusion makes cloud-based service for physicians, hospitals and medical billing services. Its MediTouch platform is currently used by over 3,000 physician practices, hospital ambulatory centers and medical billing services, totaling more than 6,000 subscribers. The company has historically achieved meaningful double-digit annual revenue growth rates, with a recent annualized revenue pace exceeding $30 million.
HealthFusion’s MediTouch platform is currently used by over 3,000 physician practices, hospital ambulatory centers and medical billing services.“HealthFusion brings an extremely intuitive, fully mobile, cloud-based solution that affords smaller groups of physicians and other providers a clean EHR experience within a fully integrated suite of solutions for their practice,” said Rusty Frantz, president and CEO of Quality Systems. “Over time, we will focus on expanding the platform to satisfy the needs of practices of increasing size and complexity. We will also look to provide some of our broader service capabilities to the HealthFusion client base.”
Quality Systems has secured $200 million in fully committed financing from J.P. Morgan and U.S. Bank. At closing of the transaction, the company expects to fund approximately $115 million of the consideration via this credit facility and the remainder through excess cash on hand.
J.P. Morgan Securities LLC is acting as financial advisor and Latham & Watkins LLP is serving as legal counsel to Quality Systems. TripleTree is acting as exclusive financial advisor and Wilson Sonsini Goodrich & Rosati is serving as legal counsel to HealthFusion.
The transaction is subject to customary closing conditions and is expected to be completed by March 31, 2016. Quality Systems expects this transaction to be accretive to its non-GAAP earnings in the first full year following the acquisition.
UPDATE: The acquisition has been completed on January 4, 2016.