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Synetic sets $1.4B purchase
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May 17, 1999: 9:57 a.m. ET
Health-care and technology firm to acquire Medical Manager in stock swap
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NEW YORK (CNNfn) - Synetic Inc., a health-care product and Internet software provider, said Monday it agreed to purchase physician practice-management company Medical Manager Corp. for $1.4 billion in stock, a move that will give Synetic access to Medical Manager's broad network of doctors.
Elmwood Park, N.J.-based Synetic will issue 0.625 share of its stock for each share of Medical Manager, a 77 percent premium to Medical Manager's Friday closing price of 33-1/4, down 2-5/16. Synetic's stock fell 3-7/8 to 95-1/2.
Synetic (SNTC) said the acquisition will allow it to expand the way it helps physicians communicate electronically with suppliers and patients, and also will help doctors better organize the way they pay for services, materials and supplies. Synetic will gain access to the 120,000 doctors who use Medical Manager (MMGR)'s services to manage patient and billing data. The new company will retain the name Medical Manager.
CareInsite, Synetic's healthcare e-commerce unit that handles the Internet side of its business, will set up its own portal on the Internet to link individual physicians with hospital information management systems. Synetic's other subsidiary, Porex Technologies, designs, manufactures, and distributes plastic components and products used in healthcare, industrial, and consumer applications.
Synetic said it's still on track to launch CareInsite as a separate, publicly traded company within the next two to three months. CareInsite already has filed a registration statement with the Securities and Exchange Commission for the initial public offering of its shares.
The proposed merger comes as Healtheon Corp. braces to make public its bid for WebMD (WBMD), a closely held provider of medical information and services over the Internet. Healtheon was launched by Netscape Communications founder Jim Clark to process health-care transactions over the Internet.
Healtheon (HLTH) shares jumped 10 to 57 Friday on expectation that the two firms would merge, creating a company worth about $3.5 billion, and one that's dominant in the fast-growing business of managing medical data on the Internet. Confirmation of that marriage and details of the transaction have yet to be released by the company.
WebMD had scheduled its own IPO this month, seeking to raise as much as $55 million. But last week, WebMD asked the SEC for permission to withdraw its registration statement, saying it had decided to "pursue a strategy that does not involve the offer and sale of its shares to the public." 
-- from staff and wire reports
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