Veradigm no longer for sale–it’s standing alone for the foreseeable future. Late yesterday’s announcement by Veradigm’s board of directors committed Veradigm, for the time being, to going forward as a whole concern and formally ended their search for “strategic alternatives” a/k/a an asset sale. The board has now moved to a different kind of “strategic” planning, contracting with an unnamed strategic advisory firm. They will advise the board on operational improvements and organizational alignment for profitable growth, long-term success, and driving stockholder value. Their CEO, Tom Langan, is still listed as “interim”. There is no indication that a permanent CEO will be named.
Background. Despite the November rumors that the company was close to a sale by Thanksgiving, none of the “finalists”, listed by the sources as McKesson, Oracle, and private equity bidder Thoma Bravo, finalized any bids. The release reveals that 30 parties submitted confidentiality agreements and five submitted preliminary, non-binding indications of interest. There were no final proposals. The price, estimated at about $1 billion, may have put them off. It apparently was too big to buy and too difficult to separate.
As previously noted, in an uncertain market, Veradigm, the former Allscripts, stands out as apparently healthy but unwieldy with a wide scope of desirable healthcare data services and systems. What makes the company unattractive is years of financial reporting problems due to a still unsorted software problem dating back to 2022, which led to its Nasdaq delisting last February due to its inability to be audited and file required financial reports. It’s trading at $5.40 over the counter (MDRX), sinking by half since last year, yet it has been profitable (though unaudited). Veradigm’s board in the release disclosed that it will provide in mid-March updated fiscal year 2023 and preliminary fiscal year 2024 estimated unaudited financial ranges plus a business and audit update. After that, they plan to resume a cadence of financial reporting and guidance.
Two days earlier, board member and Audit Committee Chair Beth Altman resigned on 28 January. Interestingly, the release specified in the all-important first paragraph that it was for “health reasons”, “not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices” and wished her well. Ms. Altman joined the board in 2020. She was formerly a managing partner at KPMG in San Diego and holds two other long-term board positions, according to her LinkedIn profile. She will be replaced by Greg Garrison, a previous Audit Chair. Parties interested in joining the board can contact Veradigm.
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