Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) Monetizes Interest InNetsmart Technologies

Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) announcement to sell-off its interest in Netsmart Technologies, Inc created a lot of excitement around the company’s stock. According to Zachs, the news incited a lot of activities around the company’s stock resulting in a 5.7% gain in its value. The company’s stock is closed at $10.10 in the previous trading period and is trading at $10.14 as of this writing.


Allscripts Mediocre Numbers

Allscripts’ stock has plunged -31.48% this quarter far lower than the general industry plunge. The company’s stock scored an analysts rating of 2.3 with a price target of $13.86. The Q3 2018 earnings signal a spendthrift company (probably) positioning itself for long-term growth. The company’s year-over-year operating expenses surged 20.4%, selling, general and administrative costs rose 13.5% to an alarming $133.2 million with allocations for Research and Development totaling $69.7 million- 36.4% rise.

Meanwhile, Allscripts Healthcare’s Q3 bookings dropped to $246 million compared to an impressive $304 million last years as the management anticipates more uncertainties going forward.

On the brighter side, Allscripts Healthcare went big on contracts in the Q3 period with new signings and extensions on existing contracts.

Despite the worrying figures, Allscripts maintains a 2018 revenue guidance of $2.15 billion to $2.25 billion, a 17-22% rise year over year.

Allocation of Proceeds from Netsmart Sale

Allscripts acquired large ownership of Netsmart back in March 2016 in exchange for its homecare business. Through the partnership, Netsmart grew exponentially to become a renowned tech company in behavioral health, human services and post-acute care.

Allscripts will reportedly make approximately $525 million after-tax proceeds from the sale. The deal is expected to be closed by the end of Q4 2018 upon fulfillment of all regulatory requirements.

Allscripts’ management plans to use the proceeds from the sale to settle long-term debts as well as investing in its rapid expansion plans. The remaining amount will be directed to repurchasing the company’s common stock in line with its stock repurchase program. The program aimed at repurchasing up to $200 million worth of Allscripts’ common stock through December 31, 2019, was approved by the company’s board of directors.

Speaking about the transaction, Allscripts CEO Paul M. Black, stated that “Allscripts investment in Netsmart helped create a critical solution for caregivers to achieve the value-based care goal of healthy communities and populations. Through our ownership position, we quickly generated significant value, and this transaction will be beneficial for our shareholders, our clients and our organization.”


On November 14, Allscripts unveiled Veradigm™ as its new face for Allscript’s Payer & Life Sciences division. Veradigm™ is a provider of health insights based on actual medical data and analysis aimed at bringing about cost-effective healthcare and efficient delivery in general. Veradigm leverages on Allscripts existing healthcare networks to draw insights that will help improve the quality of healthcare delivery.

Allscripts prides a skilled leadership that has seen the American Diabetes Association appoint its Chief Medical officer, Fatima Paruk to the Community Leadership Board. The community Leadership board comprises of 18 leaders. The board is tasked with efforts of championing for the association’s Vision of Working toward a life free of diabetes and all its burden.

Dr.Paruk joins in with broad expertise in medical leadership and will help in creating and deploying models ‘predictive models to improve health.’

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