Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 20, 2008

 

 

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   000-32085   36-4392754
(State or Other Jurisdiction
of Incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (312) 506-1200

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 8.01. Other Events.

Attached as Exhibit 99.1 is an updated investor presentation that Allscripts Healthcare Solutions, Inc. (the “Company”) expects to use in presentations to analysts and others related to the Agreement and Plan of Merger (the “Merger Agreement”) dated as of March 17, 2008 by and among the Company, Misys plc, a public limited company incorporated under the laws of England (“Parent”), Misys Healthcare Systems LLC, a North Carolina limited liability company and wholly-owned indirect subsidiary of Parent, and Patriot Merger Company, LLC, a North Carolina limited liability company and wholly-owned subsidiary of the Company, and the transactions contemplated thereby.

The presentation attached hereto as Exhibit 99.1 includes certain financial information not derived in accordance with generally accepted accounting principles (“GAAP”). The Company believes that the presentation of this non-GAAP financial information may be useful to investors as it provides general information regarding the proposed business to be acquired and operated by the Company, assuming that the stockholders of the Company approve the Merger Agreement and the related matters.

Important Additional Information and Where to Find It

This communication is being made in respect of the proposed business combination involving Allscripts Healthcare Solutions, Inc. (“Allscripts”) and Misys Healthcare Systems LLC (“MHS”), a wholly owned subsidiary of Misys plc (“Misys”). In connection with this proposed transaction, Allscripts intends to file with the Securities and Exchange Commission (the “SEC”) a preliminary proxy statement, a definitive proxy statement and other related materials, and Parent intends to file a shareholder circular with the Financial Services Authority in the United Kingdom. The definitive proxy statement will be mailed to the stockholders of Allscripts, and the shareholder circular will be mailed to the shareholders of Parent. BEFORE MAKING ANY DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THESE DOCUMENTS AND OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED TRANSACTION. Investors and security holders can obtain copies of Allscripts’ materials (and all other offer documents filed with the SEC) when available, at no charge on the SEC’s website: www.sec.gov. Copies can also be obtained at no charge by directing a request for such materials to Allscripts at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654, Attention: Lee Shapiro, Secretary. Investors and security holders may also read and copy any reports, statements and other information filed by Allscripts with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room. Allscripts’ directors, executive officers and other members of management and employees may, under the rules of the SEC, be deemed to be participants in the solicitation of proxies from the stockholders of Allscripts in favor of the proposed transaction. Information about Allscripts, its directors and its executive officers, and their ownership of Allscripts’ securities, is set forth in its proxy statement for the 2007 Annual Meeting of Stockholders of the Company, which was filed with the SEC on April 30, 2007. Additional information regarding the interests of those persons may be obtained by reading the proxy statement and other relevant materials to be filed with the SEC when they become available.


Forward-looking Statements

This communication contains forward-looking statements. Those forward-looking statements include all statements other than those made solely with respect to historical fact. Forward-looking statements may be identified by words such as “believes”, “expects”, “anticipates”, “estimates”, “projects”, “intends”, “should”, “seeks”, “future”, “continue”, or the negative of such terms, or other comparable terminology. Such statements include, but are not limited to, statements about the expected benefits of the transaction involving Allscripts, MHS and Parent, including potential synergies and cost savings, future financial and operating results, and the combined company’s plans and objectives. In addition, statements made in this communication about anticipated financial results, future operational improvements and results or regulatory approvals are also forward-looking statements. Such forward-looking statements are subject to numerous risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors that could cause actual results to differ materially include, but are not limited to: (1) the occurrence of any event, development, change or other circumstances that could give rise to the termination of the merger agreement; (2) the outcome of any legal proceedings that have been or may be instituted against Allscripts, Parent or MHS and others following announcement of entering into the merger agreement; (3) the inability to complete the proposed transaction due to the failure to obtain stockholder or shareholder approval or the failure of any party to satisfy other conditions to completion of the proposed transaction, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of other required regulatory approvals; (4) risks that the proposed transaction disrupts current plans and operations and potential difficulties in employee retention as a result of the merger; (5) the ability to recognize the benefits of the merger; (6) legislative, regulatory and economic developments; and (7) other factors described in filings with the SEC. Many of the factors that will determine the outcome of the subject matter of this communication are beyond Allscripts’, Parent’s and MHS’ ability to control or predict. Allscripts can give no assurance that any of the transactions related to the merger will be completed or that the conditions to the merger will be satisfied. Allscripts undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. Allscripts is not responsible for updating the information contained in this communication beyond the published date, or for changes made to this communication by wire services or Internet service providers.

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

The following exhibits are filed herewith:

 

Exhibit No.

   

Exhibit 99.1

  Investor Presentation dated March 20, 2008


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
Date: March 20, 2008   By:  

/s/ William J. Davis

    William J. Davis
    Chief Financial Officer


EXHIBIT INDEX

The following exhibits are filed herewith:

 

Exhibit No.

   

Exhibit 99.1

 

Investor Presentation dated March 20, 2008

Investor Presentation
Creating a Clear Leader
in Physician Solutions
Presentation to Analysts
March 20, 2008


A Clear Leader in Physician Solutions
2
Forward Looking Statements
This communication contains forward-looking statements.  Those forward-looking statements include all
statements other than those made solely with respect to historical fact.  Forward-looking statements may
be identified by words such as “believes”, “expects”, “anticipates”, “estimates”, “projects”, “intends”,
“should”, “seeks”, “future”, continue”, or the negative of such terms, or other comparable terminology. 
Such statements include, but are not limited to, statements about the expected benefits of the transaction
involving Allscripts, MHS and Misys, including potential synergies and cost savings, future financial and
operating results, and the combined company’s plans and objectives.  In addition, statements made in this
communication about anticipated financial results, future operational improvements and results or
regulatory approvals are also forward-looking statements. Such forward-looking statements are subject to
numerous risks, uncertainties, assumptions and other factors that are difficult to predict and that could
cause actual results to vary materially from those expressed in or indicated by them. Factors that could
cause actual results to differ materially include, but are not limited to: (1) the occurrence of any event,
development, change or other circumstances that could give rise to the termination of the merger
agreement; (2) the outcome of any legal proceedings that have been or may be instituted against
Allscripts, Misys or MHS and others following announcement of entering into the merger agreement; (3)
the inability to complete the proposed transaction due to the failure to obtain stockholder or shareholder
approval or
the
failure
of
any
party
to
satisfy
other
conditions
to
completion
of
the
proposed
transaction,
including the
expiration
of
the
waiting
period
under
the
Hart-Scott-Rodino
Antitrust
Improvements
Act
of
1976, as amended, and the receipt of other required regulatory approvals; (4) risks that the proposed
transaction disrupts current plans and operations and potential difficulties in employee retention as a result
of the merger; (5) the ability to recognize the benefits of the merger; (6) legislative, regulatory and
economic developments; and (7) other factors described in filings with the SEC. Many of the factors that
will determine
the
outcome
of
the
subject
matter
of
this
communication
are
beyond
Allscripts’,
Misys’
and
MHS’
ability to control or predict.  Allscripts can give no assurance that any of the transactions related to
the merger will be completed or that the conditions to the merger will be satisfied.  Allscripts undertakes no
obligation to revise or update any forward-looking statement, or to make any other forward-looking
statements, whether as a result of new information, future events or otherwise.  Allscripts is not
responsible for updating the information contained in this communication beyond the published date, or for
changes made to this communication by wire services or Internet service providers.


A Clear Leader in Physician Solutions
3
Additional Information and Where to Find It
This communication is being made in respect of the proposed business combination involving Allscripts,
Inc. (“Allscripts”) and Misys Healthcare Systems LLC (“MHS”), a wholly owned subsidiary of Misys plc
(“Misys”). In connection with this proposed transaction, Allscripts intends to file with the Securities and
Exchange Commission (the “SEC”) a preliminary proxy statement, a definitive proxy statement and other
related materials, and Misys intends to file a shareholder circular with the Financial Services Authority in
the United Kingdom. The definitive proxy statement will be mailed to the stockholders of Allscripts, and the
shareholder circular will be mailed to the shareholders of Misys.  BEFORE MAKING ANY DECISION
WITH RESPECT
TO
THE
PROPOSED
TRANSACTION,
INVESTORS
AND
SECURITY
HOLDERS
ARE
URGED TO READ THESE DOCUMENTS AND OTHER RELEVANT MATERIALS WHEN THEY
BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
COMPANY AND THE PROPOSED TRANSACTION. Investors and security holders can obtain copies of
Allscripts’
materials (and all other offer documents filed with the SEC) when available, at no charge on the
SEC’s website:
www.sec.gov.
Copies
can
also
be
obtained
at
no
charge
by
directing
a
request
for
such
materials
to Allscripts at 222 Merchandise Mart Plaza, Suite 2024, Chicago, Illinois 60654, Attention: Lee
Shapiro, Secretary, or to Misys at 125 Kensington High Street, London W8 5SF, United Kingdom,
Attention: Group General Counsel & Company Secretary. Investors and security holders may also read
and copy any reports, statements and other information filed by Allscripts with the SEC, at the SEC public
reference room at 100 F Street, N.E., Washington, D.C. 20549.  Please call the SEC at 1-800-SEC-0330
or visit the SEC’s website for further information on its public reference room.
Allscripts’
directors,
executive officers
and
other
members
of
management
and
employees
may,
under
the
rules
of
the
SEC,
be deemed
to
be
participants
in
the
solicitation
of
proxies
from
the
stockholders
of
Allscripts
in
favor
of
the
proposed transaction.  Information about Allscripts, its directors and its executive officers, and their
ownership of Allscripts’
securities, is set forth in its proxy statement for the 2007 Annual Meeting of
Stockholders of the Company, which was filed with the SEC on April 30, 2007.  Additional information
regarding the interests of those persons may be obtained by reading the proxy statement and other
relevant materials to be filed with the SEC when they become available.


A Clear Leader in Physician Solutions
4
Agenda
Bill Davis, CFO of Allscripts
CFO designate of Allscripts-Misys
Synergies and
Allscripts-Misys Financials
Glen Tullman, CEO of Allscripts
CEO designate of Allscripts-Misys
Allscripts-Misys:
A Clear Leader


A Clear Leader in Physician Solutions
5
Transaction Summary
Allscripts-Misys Healthcare
Company Name
Four to Six Months
Expected Closing
$330m Cash (approximately $4.90 per share)
Retain their shares in MDRX
NASDAQ listing maintained
Allscripts
Shareholders
Receive
Misys plc: 54.5%
Allscripts: 45.5%
Pro Forma
Ownership
Glen Tullman -
CEO designate
Bill Davis -
CFO designate
Mike Lawrie -
Executive Chairman designate
Management
Allscripts to Merge with Misys Healthcare
Misys to pay $330m
Structure
Fully diluted shares
Note: All ownership percentages and per share amounts are calculated on a fully diluted basis


A Clear Leader in Physician Solutions
6
A Transformational Deal
Misys and Allscripts will each combine  their respective
healthcare businesses into Allscripts-Misys
Misys will also transfer $330m in cash to Allscripts-Misys
resulting in a 54.5% ownership interest (on a fully diluted basis)
for Misys in Allscripts-Misys
Allscripts shareholders will receive a special dividend of $330m
Cash will be financed by new banking facilities and a placing
underwritten by ValueAct Capital Management LLC
Allscripts-Misys Healthcare will be quoted on the NASDAQ
Misys plc will remain quoted on the LSE


A Clear Leader in Physician Solutions
7
A Clear Leader in Physician IT Solutions
“The perfect match in the perfect market”: Top rated
EHR + market share leader for PM in the growing
small/mid-sized physician group market
Highly rated, innovative products in every market
segment in which we compete (small/mid/large)
Experienced and proven management team
Creates revenue/cost synergies and near-term value
accretion for Allscripts-Misys
High recurring revenue visibility and strong potential
profit growth
Strong growth potential in a growing market
A clear leader in clinical software, information and connectivity solutions


A Clear Leader in Physician Solutions
8
8
A Vision…
Every day in the U.S.
approximately
150,000 physicians
will log on to a screen
that says
“Allscripts-Misys”
Source: Allscripts and Misys Estimates


A Clear Leader in Physician Solutions
9
Today’s
Physician
IT
Market
An
Opportunity
Clinical /
Electronic
Health Records
The Market…
Highly fragmented market with over 300 participants
Historically divided between core practice management and clinical vendors
Paradigm shift to complex clinical system driving IT decisions and
consolidation in the ambulatory markets
Allscripts-Misys…
A footprint of approximately 150,000 physicians
A complete portfolio of integrated solutions, products and services
Core Practice
Management
Epic
GE
NextGen
Sage
eCw


A Clear Leader in Physician Solutions
10
A Proven Approach…
Practice Management System
Electronic Health Record
Installed Base (2008) = 113,000 MDs
Primarily in Small-Mid Sized Practices
2001:
Allscripts Gained Exclusive
Partnership to Market Allscripts
EHR to IDX PM Base
2008:
Allscripts Gains Exclusive
Opportunity to Market Allscripts
EHR to Misys PM Base
Installed Base (2001) = 138,000
MDs Primarily in Larger Practices


A Clear Leader in Physician Solutions
11
Market Opportunity
~ 500,000 U.S. Practicing Physicians
x          80% EHR Market Opportunity
x  ~$12,000 Initial Investment/Physician
= ~$5 Billion Opportunity
Electronic Health Record (EHR) Market = ~ $5 Billion
Practice Management (PM) Market = ~ $1 Billion/Yr.
~10% to 20% of PM Systems Replaced/Yr.
Software Maintenance Agreement (SMA) = ~ $1 Billion/Yr.
Transactions = ~
$1 to 2 Billion/Yr.
American Presidential candidates see technology as the answer to
a
better healthcare delivery system


A Clear Leader in Physician Solutions
12
The Market Segments in Which We Compete
Large Practices/
AMCs/Hospitals
25<200 MDs
Mid-Sized
Practices
10<24 MDs
Small Practices
1<10 MDs
Key:
Limited Presence
Leader
EHR
Practice Mgmt.
e-Prescribing
Connectivity
Solutions
Allscripts
Misys
Allscripts-
Misys
Source: Allscripts and Misys Assessment


A Clear Leader in Physician Solutions
13
The Largest Client Footprint in the U.S.
Allscripts
Misys
110,000 Physicians, 18,000 Medical Practices, 600 Homecare Agencies


A Clear Leader in Physician Solutions
14
The Largest Client Footprint in the U.S.
Allscripts-Misys
Approximately 150,000 Physicians and 700+ Hospitals Across the U.S.


A Clear Leader in Physician Solutions
15
Product Strategy
Overall
Approach:
We
will
support
all
products
The Opportunity:
$1 Billion opportunity selling Allscripts EHR
into Misys PM installed base (currently < 20% penetrated)
EHR
Sales
in
the
Small
Office
Market:
In
addition,
we
believe
there is
an
opportunity
with
MyWay
as
an
ASP
solution
for
small
practices


A Clear Leader in Physician Solutions
16
Compelling Strategic Rationale
Covers approximately 1 out of 3 of all physicians in America*
Brings together leaders in PM and EHR
Ability to network across healthcare from the emergency
department to the ambulatory settings
Large installed base to sell leading EHR and other products into
Ability to help drive industry and technical standards for
functionality and interoperability
Creates a “hub”
from which we can sell into an existing Misys PM
base, similar to the successful IDX strategy
Leader in
EHR and PM
Highly
Complementary
Businesses
Significant opportunity for revenue and cost synergies through
cross-selling and rationalisation of overlapping functions
Drives long-term top and bottom line growth
Stability through a high percentage of recurring revenue
Powerful
Strategic
Financial
Rationale
* Allscripts and Misys Estimates


A Clear Leader in Physician Solutions
17
Creates a Clear Leader: Allscripts-Misys
A clear leader in clinical software, information and
connectivity solutions that empower physicians to
deliver healthcare safely, efficiently and effectively
+


A Clear Leader in Physician Solutions
18
18
About Misys
4,500 Employees Serving 120 Countries
$902m
in Revenue (Fiscal 2007) –
Misys plc
LSE: MSY
Market Leader in Banking and Treasury and Capital markets
worldwide with over 1,200 banks and financial institutions
Significant Market Presence in Healthcare
Practice Management
Claims Management
Electronic Health Records
110,000 Physicians
$376m
in Revenue (Fiscal 2007) –
Misys Healthcare


A Clear Leader in Physician Solutions
19
Transaction Summary
Allscripts-Misys Healthcare
Company Name
Four to Six Months
Expected Closing
$330m Cash (approximately $4.90 per share)
Retain their Shares in MDRX
NASDAQ listing maintained
Allscripts
Shareholders
Receive
Misys plc: 54.5%
Allscripts: 45.5%
Pro Forma
Ownership
Glen
Tullman
-
CEO
designate
Bill Davis -
CFO designate
Mike Lawrie -
Executive Chairman designate
Management
Allscripts to Merge with Misys Healthcare
Misys to pay $330m
Structure
Fully diluted shares
Note: All ownership percentages and per share amounts are calculated on a fully diluted basis


A Clear Leader in Physician Solutions
20
Understanding the Combined Enterprise Value
~$790  to 840mm
Total Contribution
$330mm
Cash Contribution
~$460  to 510mm
1
Misys Healthcare Business
(for 54.5% ownership share)
Misys plc contributed the following for a 54.5% stake in Allscripts-Misys
This implies a combined enterprise value of ~ $1.4 to 1.5 billion
(1)
Misys
Healthcare
enterprise
value
based
on
applying
a
range
of
revenue
multiples
(~1.2x
1.4x)
to
Misys
Healthcare’s
FY2007A
revenue
of
$376
million.


A Clear Leader in Physician Solutions
21
Understanding the Combined Enterprise Value
~$40m
~$345m
Allscripts Stand-Alone  
(2008)
~$85m to 90m
Adjusted Earnings
~$720 to $725m
Revenue
Combined Pro-Forma
(2008)
What this implies for current Allscripts equity holders
Implied Enterprise Value = $1.4 to $1.5 billion
~$970  to $1,100m
Total Value
~$14.30 to $16.20
Implied Per Share Value (67.8m shares)
$330m
+ Dividend
~$640  to $680m
Allscripts Shareholder Portion of
Implied Enterprise Value
1
Represents point estimate within guidance range provided by company
2
Adjusted earnings = net income + stock-based compensation and deal related amortization, both net of tax
3
Assumes $15 to $20m of first year synergies, pre-tax
2
1
3


A Clear Leader in Physician Solutions
22
Allscripts shareholders receive approximately $4.90 per share in
cash and 45.5%
ownership position in Allscripts-Misys
Annual cost synergies $15-$20m expected in first year following transaction close
Allscripts-Misys Long-Term Growth Profile
Low double digit top line growth
Better visibility and higher percentage of stable, recurring revenue
Up to $25m to $30m in annual cost savings within three years
Revenue synergies from cross-selling to respective install bases
Increased operating leverage expected to result in mid-teens EPS growth
Value Creation


A Clear Leader in Physician Solutions
23
Significant and Realizable Synergy Opportunity
Cost synergies of $15m to $20m
expected in first year following
transaction close
Up to $25m to $30m in annual cost
savings within the next few years
Main drivers of cost synergies
include: Overhead, R&D, Marketing,
Administrative Functions
Revenue synergies expected from cross-
selling into respective client bases
Increased operating leverage expected to
result in mid teens EPS growth
Projected Cost Synergies
$15 -
$20m
$25 -
$30m
First
Year
Run
Rate


A Clear Leader in Physician Solutions
24
Receive US antitrust clearance
Complete the carve-out financial audits
File the US proxy
Distribute the shareholder circular for Misys plc shareholders
Shareholder vote from both Misys plc and Allscripts shareholders
Significant transaction costs will be recognized by Allscripts in Q1
Expected to close in four to six months
Roadmap to Completion


A Clear Leader in Physician Solutions
25
Q&A