Once expected to be valued at $1.5 billion, cloud-based electronic health records vendor Practice Fusion will be acquired by larger EHR provider Allscripts for $100 million in cash.
Just two years ago, Practice Fusion had hired JPMorgan Chase to explore going public, estimating its revenue in 2018 would be as high as $181 million. Since then, however, the rush of spending to meet Meaningful Use requirements has slowed considerably and the EHR market has consolidated around a few big vendors, leaving little room for smaller startups like Practice Fusion.
For Allscripts, the purchase expands its reach into more outpatient settings with the 30,000 small, independent physician practices using Practice Fusion platforms, including EHR, patient portals and practice management software.
“Combined with Practice Fusion, we expect Allscripts to continue to drive innovation in addressing gaps-in-care, improving clinical outcomes and real-world-evidence research,” Allscripts president Rick Poulton said in a statement. “Plus, Practice Fusion’s affordable EHR technology supports traditionally hard-to-reach independent physician practices, and its cloud-based infrastructure aligns with Allscripts forward vision for solution delivery.”
In 2015, Practice Fusion owned the largest market share for solo practices at 15 percent.
Allscripts expects the deal to close in the first quarter of 2018. It’s the second major acquisition for the Chicago-based company in the past six months following its $185 million deal for McKesson’s health IT business. Last year, Allscripts was ranked fourth in revenue related to EHR hardware behind Cerner, McKesson and Epic.