Monday, June 4, 2012

Allscripts shores up board, HealthCor drops lawsuit

CHICAGO – In an agreement with one of its largest shareholders, beleaguered EHR vendor Allscripts (NASDAQ: MDRX), plans to shore up its board of directors with three new independent members. As a result, investor HealthCor will drop its lawsuit against the technology company.

Nominated to the Allscripts board are Stuart L. Bascomb, David D. Stevens and Randy Thurman. Elections are set for the 2012 annual meeting of stockholders scheduled for June 15. Each nominee has previously served on the boards of directors of public companies and private organizations.

[See also: Web First: Q&A with Allscripts CEO Glen Tullman]

HealthCor, which had previously called for CEO Glen Tullman’s resignation, owns approximately 6.1 percent of the outstanding shares of Allscripts’ common stock.

Tullman said in a news release today the new members would “bring new perspectives and additional industry experience to our board.”

“Taken together with the recent additions of Paul Black and Robert Cindrich, the company will have added five, high-quality, independent directors in just the past few weeks,” Tullman added. “We believe this is a positive outcome for Allscripts and its stockholders and we look forward to working collaboratively as we continue to implement our strategic initiatives and make the important and necessary investments to deliver a connected community of health for our clients and build value for all of our stockholders.”

[See also: Allscripts: Debacle or silver lining?]

“We are pleased to have reached this amicable resolution with Allscripts, which we believe will serve the best interests of all stockholders,” said Arthur B. Cohen, co-founder and portfolio manager of HealthCor. “We continue to believe that Allscripts has great products, strong capabilities and a unique installed base of customers. Furthermore, we are confident that Stuart, David and Randy will make strong additions to the board, and will work hard to represent all stockholders and assist the company in seizing the tremendous market opportunity before it.”

Bascomb currently serves as the chairman and CEO of QualSight, a startup company in Chicago that aims to create a nationwide network of ophthalmologists to market a managed care refractive surgery program to plan sponsors. Bascomb was a founder of Express scripts in 1986 and helped lead its IPO in 1992 as the company’s CFO.

Stevens is involved as an investor and adviser in private equity, focusing on providing capital to lower-middle market growth companies in the healthcare services industry. Previously, he served as CEO of AHG Division of Medco Health Solutions, Inc., where he was responsible, as the previous chairman and CEO of Accredo Health Group, which was acquired by Medco, for the strategic direction and operation of the consolidated specialty pharmacy division of Medco (a reporting division of the parent), the largest specialty pharmacy provider in the market.

Thurman serves as the senior advisor and operating partner at New Mountain Capital LLC, a private and public equity firm with assets of more than $10 billion. He has led or co-led transactions representing more than $1 billion in enterprise value, and advised on private equity, public equity and debt transactions.  Mr. Thurman has held a number of executive positions throughout his career, including founder, chairman and CEO of Viasys Healthcare.

In addition to the three new independent nominees, the company’s nine-member slate for election at the 2012 annual meeting will consist of: Paul Black, Dennis Chookaszian, Robert Cindrich, Philip Green, Michael Kluger and Glen Tullman. Of the nine board members, eight are independent.

Allscripts troubles came to light at the end of April, and may have begun in 2010 with the Allcripts-Eclipsys merger. Allscripts stock plummedted by more than 40 percent on April 26 after it reported disappointing first-quarter results and announced it had fired its chairman, Phil Pead, who came to Allscripts as part of the Allscripts-Eclipsys merger. Three board members resigned in protest. Tullman and Allscripts customers have agreed that a big piece of the company’s trouble had to do with its failure to integrate the Allscripts/Eclipsys products.

[See also: Allscripts in skid mode as shares plunge, chairman ousted]

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