The directors of Chicago-based Veradigm Inc. said May 28 they are looking to sell, merge or otherwise arrange a transaction for the healthcare data and analytics company—which recently paid $140 million for a large language model venture as part of a push into artificial intelligence tools.
Veradigm, which was formerly known as Allscripts, is on pace to produce adjusted EBITDA of about $110 million on revenue of about $630 million this year. But its leaders are still looking to put behind them a turbulent period that featured shortcomings in its financial controls (which led to the board demanding the resignation of its former CEO and CFO) and the delisting of its shares from the Nasdaq stock exchange.
Earlier this year, interim CEO Yin Ho said the company’s plans going forward would center on marketing its database of deidentified patient data that touches more than 200 million people as well as its connections to a network of more than 400,000 providers to both insurers and life sciences firms. As part of those initiatives, Ho announced in late February that Veradigm would buy five-year-old Boston company ScienceIO for $140 million. ScienceIO’s technology uses AI to organize large amounts of healthcare data.
Ho, who was elected to Veradigm’s board in early 2023 and who took over as interim CEO in December, will not see through those plans, however. Alongside word of the decision to put Veradigm on the market, the company also said that Ho will step down as boss and resign as a director on June 7, when her interim CEO contract expires. Tom Langan, Veradigm’s president and chief commercial officer, will move into the interim CEO role.
“We are grateful that Yin stepped up to become the interim CEO at a challenging time for the company, allowing Tom to focus on the day-to-day business,” Executive Chairman Greg Garrison said in a statement. “She advanced Veradigm’s analytical and technology capabilities to further unlock value for our customers, partners and stockholders and help position the company as a leader in healthcare data intelligence. We wish Yin the best in her next endeavors.”
Interim CFO Lee Westerfield, who started in December alongside Ho, has extended his contract with Veradigm through year’s end and will look to, among other things, finish the company’s restatements of past financial reports that overstated revenues by about $20 million.
In its MA& statement, the Veradigm board noted that it has set no timetable to arrange a transaction and can’t say whether it will be able to negotiate a deal with attractive terms.
Shares of Veradigm (Ticker: MDRX) popped more than 10 percent on the strategic alternatives news. In midday trading May 28, they were changing hands around $8.40, their highest level since mid-February. Over the past six months, however, they have lost about 30 percent of their value, cutting the company’s market capitalization to about $900 million.
