OR WAIT 15 SECS
Premier, Inc. has reached a definitive agreement to acquire TheraDoc, a market leading provider of clinical surveillance software, for $117 million in cash, subject to potential purchase price adjustments regarding TheraDoc's actual working capital, cash and indebtedness at closing. The transaction is expected to close in Premier's fiscal 2015 first quarter ending Sept. 30, 2014, subject to customary closing conditions.
TheraDoc is a wholly-owned subsidiary of Hospira. Premier's board of directors unanimously approved the transaction, and applicable antitrust approvals have already been obtained. Based on the trailing 12 months operating earnings provided by TheraDoc, the $117 million represents a purchase price multiple in the 10-11 times range.
Premier expects the acquisition to be accretive to earnings in the first year following the transaction's completion.
"Our growth story continues to evolve with strategic relationships that extend our reach and add value to the U.S. healthcare system," says Susan DeVore, president and CEO of Premier. "The addition of TheraDoc propels Premier to the top position in the clinical surveillance market, significantly strengthening our ability to help health systems monitor and protect patients from infections, harmful drug interactions and other adverse events, crucial capabilities in today's world of performance-based reimbursement. Longer term, we expect the addition of TheraDoc will enable us to create a next-generation predictive safety solution built on Premier's integrated technology platform."
The transaction combines two market leaders with capabilities in data analytics and real-time electronic clinical surveillance. TheraDoc and Premier's capabilities with its SafetyAdvisor® solution are similar in their ability to support both infection prevention and drug therapy surveillance.
Premier has data on one in every three U.S. health system discharges, pushed to members through software as a service (SaaS) apps housed on the PremierConnect® integrated technology platform. Combined, the two organizations will provide clinical surveillance expertise to approximately 1,000 facilities, 400 of which do not have a current relationship with Premier. TheraDoc was ranked as the top product in the infection control and monitoring software category in both 2012 and 2013 by KLAS, a leading health informatics research company. Leveraging this asset in combination with PremierConnect will support a next-generation solution of more than 1,000 safety alerts, capabilities that go well beyond those of electronic health records (EHRs).
"Healthcare providers will benefit from the shared strength, expertise and vision of this partnership," says France Pitera, who is currently vice president of clinical information technology for Hospira, and is planned to be named vice president of safety solutions for Premier. "Considering that only 50 percent of providers have invested in electronic clinical surveillance, our increased scope already addresses a largely untapped marketplace with an unmatched, best-in-class solution. We will leverage the collective resources of TheraDoc and deep analytics capabilities available through the PremierConnect platform to continue developing a broad suite of quality and safety products in a cutting-edge SaaS model."
"Additionally, this agreement allows Hospira to dedicate even more focus on supporting our strategic growth platforms, including our specialty injectable pharmaceuticals pipeline, biosimilars program and device strategy," says Thomas Moore, president of the United States business division for Hospira.
TheraDoc's offices in Salt Lake City and its 120 employees will become part of Premier's Performance Services business unit, reporting to Keith J. Figlioli, Premier's senior vice president of healthcare informatics.
"From a financial perspective, we expect TheraDoc to contribute revenue and earnings growth to our business segment," says Figlioli. "More importantly, this business mixture enables us to deploy an enhanced and superior safety solution to the market over time. It will help to improve clinical outcomes by eliminating unjustified variation and waste associated with preventable infections, which costs the nation's healthcare system more than $9.8 billion a year in staff time and added treatment expense, before accounting for the added financial impact of reimbursement penalties. It also provides us access to new health systems currently outside the Premier alliance, including many academic institutions."
Source: Premier, Inc.