Two e-health mergers blow up
MedicaLogic Inc. and Medscape Inc. have completed their merger, but two other mergers in the e-health sector have collapsed in light of investor opposition.
In May, TriZetto Group Inc. and IMS Health Inc. canceled their merger agreement. Neoforma.com Inc., an online marketplace for buyers and sellers of medical supplies and equipment, and Eclipsys Corp., which sells hospital information systems, announced they are aborting their agreement as well.
Both deals crumbled because of opposition from Wall Street, which sent the companies' stock prices plunging after the deals were announced in March. The overall sluggishness of the e-health sector also hurt.
Although the stocks of MedicaLogic, which sells electronic records software, and Medscape, a provider of online medical information, received a similar reception as the two failed deals, the companies successfully completed their merger in May in a stock swap valued at $154 million. That's a far cry from the $734 million the deal was initially valued at in February. The combined company now is known as MedicaLogic/Medscape Inc.
As an alternative to a full-fledged merger, TriZetto Group will pay $255 million in stock to buy IMS' Erisco Managed Care Technologies unit, which sells managed care software to insurers. IMS, a pharmaceutical data company, also has committed to use TriZetto's Internet portal to further its Internet strategy, IMS executives said. TriZetto is an application service provider.
Besides unraveling its merger with Eclipsys, Neoforma is terminating a merger with Healthvision Inc., a subsidiary of Eclipsys.
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