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Eclipsys bids $2B for rival
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March 2, 2000: 6:47 p.m. ET
Healthcare software, service provider bids for much larger Shared Medical
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NEW YORK (CNNfn) - Eclipsys Corp., a leading provider of software for healthcare companies, unveiled Thursday an unsolicited offer to buy much larger rival Shared Medical Systems Corp. for about $2 billion.
Delray Beach, Fla.-based Eclipsys, which helps health-care providers with patient information and billing, said its bid values Shared Medical shares at $67 a share, for about a 75-percent premium on the stock's closing price on Thursday. The offer would be for Eclipsys stock or for a combination of stock and cash, the company said.
In Nasdaq trading on Thursday, shares of Eclipsys (ECLP: Research, Estimates) closed up 3-1/16 at 28-5/8 ahead of its announcement. Shared Medical Systems (SMS: Research, Estimates), of Malvern, Pa., fell 1-3/16 to 38-1/16. Shared Medical's stock has been languishing during the last year.
Eclipsys said its officials had approached Shared Medical in an effort to initiate merger talks, but such discussions never came about.
Eclipsys said it expects that such a merger would add to earnings at both companies by creating the world's leading provider of business solutions for the healthcare industry and enhancing growth prospects. Eclipsys said that a deal would provide cost savings of more than $100 million through elimination of operational, service and product redundancies.
"We are just at the beginning of an information revolution in healthcare," Harvey Wilson, Eclipsys chairman and chief executive, said in a statement. "This will create an entity and a solution that will give unparalleled support for the delivery of healthcare wherever and however it is provided."
Eclipsys, which had 1998 revenues of about $171 million, said it expects earnings growth of 40 percent annually over the next several years. Shared Medical had 1999 sales of $1.2 billion.
A Shared Medical spokesperson could not be reached for comment. 
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