(By Mani) Allscripts Healthcare Solutions, Inc. (NASDAQ: MDRX) said Paul Black, has been selected to take over as CEO, replacing Glen Tullman. In addition, the board has determined the company will be better served remaining an independent, public company under new management, after concluding an evaluation of strategic alternatives.
"We are not surprised by the move as Mr. Tullman's tenure seemed tied to completing a sale," Oppenheimer analyst Bret Jones said in a client note.
Since, the M&A option is off the table, shares were down as much as 17 percent.
Though of the appointment of Black, who has been serving on the company's board since May, will be well received by investors, given his operational experience from his days at Cerner Corp. (NASDAQ: CERN), shares could be weak as holders anticipating a buyout are flushed out of their stock.
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New CEO Black spent more than 12 years with Cerner and retired as its Chief Operating Officer in 2007. He helped build Cerner into a market leader in healthcare information technology solutions with more than $1.5 billion of annual revenues. For most of his career at Cerner, Black was Chief Sales Officer, playing an instrumental role in the company's double-digit organic growth.
"Paul possesses a unique blend of operational, healthcare and IT sector expertise, and we are pleased that he has agreed to lead the Company at this critical juncture," Allscripts Chairman Dennis Chookaszian said in a statement.
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Moreover, Black's deep domain expertise in healthcare technology, industry relationships, and understanding of Allscripts' solutions and client base make him the ideal choice.
Now that the company pulled itself off the sale block, value investors will need to gain comfort that the new product releases resolve the stability and interoperability that have caused customer churn.
The company will move forward with a new management team and has already announced the availability of the revenue cycle management product – Sunrise Financial Manager. Allscripts Sunrise Financial Manager(SFM) enables hospitals and health systems to manage revenue in an integrated way across the enterprise.
The latest in a long line of revenue cycle solutions from Allscripts, SFM features Visual Workflow capabilities, allowing users to configure the financial process to meet the organization's needs and to address constantly changing regulations and payment models in the new world of accountable care.
Allscripts provides clinical, financial, connectivity, and information solutions and related professional services to hospitals, physicians, and post-acute organizations primarily in the United States.
With the acquisition of Eclipsys, Allscripts expanded its reach into the inpatient market. Historically, Allscripts has only dipped a toe into the hospital market through its ED solution and care management offerings. As health systems continue to acquire physician practices in anticipation of evolving care models, principally accountable care organizations, Allscripts felt the need to align its ambulatory footprint with a hospital customer base.
"Given the valuation, we would normally advise investors to capitalize on the reaction. However, until the company's new product releases demonstrate that stability and integration issues are resolved, we remain on the sidelines," Jones said.