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News > Deals
Eclipsys in e-health merger
March 30, 2000: 2:05 p.m. ET

Company in deal with two online medical firms; snubs Shared Medical
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NEW YORK (CNNfn) - Health care software maker Eclipsys Corp. agreed Thursday to merge with two other online medical firms, Neoforma.com Inc. and privately held Healthvision Inc., for an estimated $2 billion in stock, shirking an unfriendly takeover attempt from its larger rival, Shared Medical Systems.
    The deal, which focuses on the business-to-business sector of the growing online medical field, reflects the rapid consolidation underway in the burgeoning online health industry. A day earlier, health care market research firm IMS Health Inc. (RX: Research, Estimates) announced a $4.8 billion merger with Internet health care firm TriZetto Group Inc.  (TZIX: Research, Estimates)
    
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     However - similar to Wall Street's reaction Wednesday to the IMS Health/Trizetto link-up - investors gave the latest pact a chilly reception, reflecting concerns over how the companies will merge operations. Neoforma stock lost 9-9/16, or 32 percent, to 20-13/16 in early afternoon trading, while Eclipsys dropped 3-3/16, or 12 percent, to 22-5/8. Shared Medical Systems stock fell 3-1/2 to 50-1/2.
    The merger comes less than a month after Eclipsys made an unsolicited $2 billion bid to buy Shared Medical Systems (SMS: Research, Estimates). Eclipsys said Thursday it is withdrawing its attempt to oust Shared Medical's board of directors and has dropped its lawsuit against the company in Delaware Chancery Court.
    
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    "Our No. 1 priority is the completion of our very exciting merger with Neoforma.com and Healthvision," Eclipsys CEO Harvey Wilson said. "However, we remain open to having further discussions with SMS."
    Under the agreement, shareholders of Delray, Fla.-based Eclipsys  (ECLP: Research, Estimates) will receive 1.344 shares of Santa Clara, Calif.-based Neoforma.com (NEOF: Research, Estimates), a medical supply e-commerce company, for each Eclipsys share they own. Based on Wednesday's closing price of Neoforma stock, the transaction is worth about $1.43 billion.
    Shareholders of Healthvision, which is affiliated with Eclipsys and national health care alliance VHA Inc., will receive 0.444 share of Neoforma.com stock for each share of Healthvision not owned by Eclipsys or VHA. Neoforma valued the deal at about $650 million.
    The agreement also includes a 10-year strategic alliance to provide e-commerce services to the 6,500 health care organizations linked to medical supplies purchaser Novation LLC, which is the supply company to VHA and the University HealthSystems Consortium, another national health care alliance.
    VHA will receive warrants for 58.6 million shares of Neoforma stock, worth about $1.78 billion based on Wednesday's stock prices, and UHC will get 10.7 million shares worth of stock, valued at about $352 million.
    The deal is expected to close this summer, pending shareholder and regulatory approval. Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.