Eclipsys Corporation® (NASDAQ:ECLP), The Outcomes Company®, today announced the acquisition of Enterprise Performance Systems, Inc. (EPSi), a leading provider of business performance-improvement solutions for healthcare providers. This acquisition strengthens Eclipsys' leadership in providing clinical, operational and financial performance-improvement solutions that help organizations manage the business of healthcare. EPSi's solutions are 2007 "Best in KLAS for Business Decision Support and the Category Leader in Budgeting.
"As The Outcomes Company, Eclipsys is committed to helping healthcare providers improve how they manage their businesses in today's financially challenging healthcare environment, said R. Andrew Eckert, Eclipsys president and chief executive officer. "The acquisition of EPSi reinforces our commitment to the financial decision support space, and we look forward to building on our company's leadership position in this market.
Acquisition Enables Eclipsys to Immediately Deliver SQL-based Business Decision Support Solutions
Like Eclipsys' clinical and access management solutions, EPSi's solutions are based upon the Microsoft SQLÂ platform. The applications are web-based, scalable, flexible and easy to implement - with documented, rapid return on investment. The addition of the EPSi product suite significantly accelerates Eclipsys' timeline for delivering a SQL-based business decision support solution.
"Eclipsys and EPSi are a winning combination for our clients and the market, as both companies are committed to delivering clients real value and real results, said Tim Rutledge, president of EPSi. "We are very excited to join the Eclipsys team and be able to provide our clients the benefits of the tremendous Eclipsys infrastructure and resources to continue our momentum, development and growth.
EPSi's management and employees are expected to continue with the business. Eckert stated, "EPSi has a very talented group of people who have built a successful business. We welcome them to Eclipsys and look forward to their ongoing contributions to the growth of this business and service to an expanding base of clients.
Transaction Details
The acquisition of EPSi by Eclipsys closed on February 25, 2008. Eclipsys acquired all of the issued and outstanding capital stock of EPSi from its former stockholders for a purchase price of approximately $53 million payable in cash at closing, subject to certain holdback arrangements and working capital adjustments.
Guidance
Eclipsys previously provided Non-GAAP guidance on February 14, 2008. At that time Eclipsys expected 2008 revenues to range from $506 to $518 million, and Non-GAAP EPS to range from $0.98 to $1.02. As a result of the acquisition of EPSI, Eclipsys is updating its non-GAAP guidance for 2008. Eclipsys now expects 2008 revenues to range from $516 to $528 million and non-GAAP EPS to range from $1.02 -$1.06. This non-GAAP guidance excludes stock-based compensation expense, costs associated with our derivative litigation, and costs associated with corporate headquarters relocation as well as amortization of acquisition related intangible assets and purchase accounting adjustments.
About EPSi
EPSi, based in St. Louis, provides a comprehensive suite of web-based applications that automate flexible budgeting, productivity, cost accounting, financial modeling, contract management, product-line analysis, enterprise-wide reporting and executive dashboard presentation. EPSi's software is suitable for hospitals and health systems of virtually any size because of the software's innovative design.
About Eclipsys
Eclipsys is a leading provider of advanced integrated clinical, revenue cycle, access management and business performance-improvement software and services that help healthcare organizations improve clinical, financial, operational and client-satisfaction outcomes. For more information, see www.eclipsys.com or email info@eclipsys.com.
About KLAS
KLAS Enterprises LLC (www.klasresearch.com) is an Orem, UT-based independent research and consulting firm specializing in monitoring and reporting the performance of healthcare information technology vendors and healthcare professional services firms. KLAS publishes a semi-annual report on vendor performance ratings by healthcare professionals. "Best in KLAS rankings celebrate vendors receiving highest provider scores for software, professional services or medical equipment. © 2007-08 KLAS Enterprises, LLC. All rights reserved.
Advisors
Piper Jaffray & Co. acted as financial advisor to Eclipsys in the transaction, and EPSi was represented by the investment banking firm of B. C. Ziegler.
Forward-Looking Statements
Statements in this news release concerning features and use of EPSi solutions, and growth and conduct of the EPSI business after the closing are forward-looking statements and actual results may differ from those projected due to a variety of risks and uncertainties. Integrating EPSI with Eclipsys to capture joint potential without interfering with the business model that has enabled EPSI's success to date may present challenges, and retention of EPSI personnel, clients and prospects is important to the success of the transaction. More information about company risks is available in recent Form 10-K and other filings made by Eclipsys from time to time with the Securities and Exchange Commission. Special attention is directed to the portions of those documents entitled "Risk Factors and "Management's Discussion and Analysis of Financial Condition and Results of Operations. Eclipsys Corporation and The Outcomes Company are registered trademarks of Eclipsys Corporation. Sunrise Analytics is a trademark of Eclipsys Corporation. Other product and company names in this news release are trademarks and/or registered trademarks of their respective companies.
Inducement Grants under NASDAQ Rules
As an inducement for employment following the closing and to align the interests of EPSi's management and certain key employees with the interests of Eclipsys stockholders, Eclipsys is issuing to various EPSi personnel a total of 196,273 shares of Eclipsys common stock, and non-qualified options to purchase a total of approximately 106,800 shares of common stock. All of the restricted stock is subject to contractual restrictions on transfer until vested; 185,296 shares vest in two equal installments on the first two anniversaries of the closing, and the balance of the restricted stock vests over approximately four years following the closing. The stock options have a seven-year term and an exercise price per share equal to the fair market value of Eclipsys common stock on the date of grant, and vest over four years. These awards are made as inducement grants pursuant to Section 4350(i)(1)(A)(iv) of the NASD Marketplace Rules.
