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Sage Healthcare Sold to Vista Equity Partners

September 22, 2011 News 20 Comments

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Sage Group PLC will sell its Sage Software Healthcare unit to private equity firm Vista Equity Partners for $320 million in cash, the British company announced this morning. The sale is expected to be completed in November.

Sage CEO Guy Berruyer said in a statement, “The sale of Sage Healthcare allows management in the North American region to focus on the considerable opportunities that exist within our core U.S. customer base.”

He was also quoted as saying, “When we bought this business, we could not have predicted that the Obama administration would change the market in the way it did. This business was contracting and it had moved away from our core strategy. Our North American business has been performing less well overall. Selling the healthcare business will allow our US team to concentrate on our business priorities again.”

Sage said it will take a loss of up to $108 million on the sale of the former Emdeon Practice Services, which it acquired for $565 million in August 2006. In the most recent six-month reporting period, the healthcare division earned profits of $15 million on revenue of $111 million.

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20 Responses to “Sage Healthcare Sold to Vista Equity Partners”

  1. 1
    Glen F. Marshall Says:

    Blaming others for one’s own failure to appreciate and respond to market dynamics is the hallmark of a loser.

  2. 2
    Wildcat Well Says:

    ….told ya so!

  3. 3
    WorkerGirl Says:

    Please don’t blame all of SHD (Sage Healthcare Division) for the comments made by one person. We have all been and continue to be working hard to give the best service and products to our clients and are disappointed by these statements as well.

  4. 4
    Med Mgr Question Says:

    What ever happened to Micky when Medical Manager/Emdeon Practice Services was sold to Sage? Weren’t the Feds in the middle of investigating that?

  5. 5
    David Macfarlane Says:

    Ouch, Glen. That’s pretty harsh, especially when you consider the statistics regarding business failure. Like this one:

    “A study done by Inc. magazine and the National Business Incubator Association (NBIA) revealed that 80 percent of new businesses fail within the first five years.”

    Of course, generalizations about personal value based on one aspect of a person’s life are easier, I know.

    So how ’bout this one: Calling someone a loser because they failed at business in a turbulent market is the hallmark of a jackass.

  6. 6
    Reefdiver Says:

    Hey David…awfully defensive remarks. Sounded to me that Glen was stating something pretty much within the bounds of conventional wisdom. Blaming…or even bringing up external things as the cause of stakeholder losses in the transaction…is just plain “no class” and an attempt at exculpatory PR. IT WAS A PRESS RELEASE GLEN COMMENTED ON. A PR is the statement of management’s official position on something…with “spin” built in. Your attack was on his very fair assessment of how a stakeholder should react to losses that are no longer just “paper”.

    So what is your excuse for giving Sage management a “free pass” for lousy performance?

  7. 7
    Hate Manual Entry Says:

    Feel bad for many of my past colleauges that worked, or still work there. Good products, great people. Poor rotating plate of senior executives since after they were WebMD Practice Services, living Qtr to Qtr. Heck, running your implementations through your SVP of Sales, great ideas… They forgot the base of customers that made up the revenues – Medical Manager sites, in exchange for new footprint Intergy customers. I wish them all the best, but with Private Equity on your back, how long before further slash and burn in order to spin it again???

  8. 8
    David Macfarlane Says:

    Nope, Reef, not defensive. I’m not even attempting to defend Sage, and your observation that Sage management is guilt of “lousy performance” is relevant and may certainly be true. If the Sage CEO failed to accurately predict the impact of market dynamics on his business, then he failed to accurately predict the impact of market dynamics on his business. Which puts him in good company.

    Note that Glen didn’t offer a critique of the Sage CEO’s business acumen and suitability for such a position. He just called him a loser, which is all too frequently a shorthand approach to completely dismissing people in this culture that evaluates total personal value based solely on commercial success. Maybe that’s not what Glen meant, but I think it is what he said.

    I think more precise, less generally disrespectful language in this age of Internet anonymity would be great, and I call ‘em like I see ‘em.

  9. 9
    No Sage Defender Says:

    Forgive me, but haven’t firms in the ambulatory emr space grown (even in the downturn) due to stimulus funds for EMR adoption? The fact that Sage executives turned over about once every 6 months for the last 3 years speaks volumes about the leadership and execution at Sage (not the market downturn).

    At one time, Medical Manager and Medic (Misys) had the world at their feet (large practice management install base). If only they could have developed an EMR product that the market wanted, they could have been a dominant force today instead of an afterthought.

  10. 10
    Drewho Says:

    It is a particularly irrelevant comment since it was the Bush administration that first proposed the HIT Incentives

  11. 11
    Pride goeth before the fall Says:

    I was not surprised to learn of the sale of Sage today as that rumor has been out there for awhile. What’s sad is to think of all the customers and employees and former employees who have been so disrespected and taken for granted over the years by a revolving door of arrogant, unmotivating, self-serving and mediocre (at best) leadership. But hey! SOMEONE hired them and perhaps they should have some accountability.
    The dollars the Obama administration pumped into the economy should have helped an EHR vendor so I hardly understand the comment “we could not have predicted that the Obama administration would change the market in the way it did”. Shouldn’t that have been their gravy train????? Sorry, I’m sticking with Lack of Strategic Leadership and Execution.

  12. 12
    Sage Comment Says:

    Best wishes to Sage Health employees. Keep moving forward and getting it done.

  13. 13
    M Lomax Says:

    Regardless of leadership failures, what should customers of SHD using their Intergy product anticipate? Health care and private practice management is getting too burdensome to have time left for quality medical care, much less worrying about software vendors interested in revenues without paying attention to care delivery.

    EHR incentives may navigate practices to vendors, but no one has yet offered an EHR product for this specialty that justifies the monetary or time expense, not to mention the headaches of following federal regulations, to accomplish these perceived goals of EHR. Don’t misunderstand me, I’m all for technology advancements and embrace fully integrated electronic records; however, there are very few dermatologists that share my opinions on EHRs.

    Until health care reform addresses the antics of insurance payors and tort reform, physician-delivered care is compromised by the restaints of federal policies.

    Don’t expect providers to spend incentive monies on products that cannot deliver quality specific to their needs or vendors that do not support their clients with successful education and training. In my opinion, the leadership that is offering HIT incentives forgot what practicing medicine is about. You’re fooling yourself if you don’t think there’s not an underlying motive in all this change. (That story for another day!)

  14. 14
    SciFi Says:

    Just stumbled on this while researching the new owners. So, what are they going to do now? They have an archaic product which cannot be supported in a large group implementation and falls well short on the “sexiness” of competing products such as eCW.

    What next?

  15. 15
    Chris Says:

    Has anyone had experience with the Vista Equity Group in the past, those of us still working for Sage are very curious to know if our future involves a new product, new energy and a bright future, or rather to expect a sharp beheading in the salary department..

    Any thoughts…?

  16. 16
    RB Says:

    I think we needed this change with the management. We the customers were frustrated with the slowness of incorporating new trends into the flagship product Intergy, which by the way, is an excellent product. Many EMR vendors have been able to land and exapand in the market is because Intergy’s lack of evolving with industry trends. If Intergy’s management had laid more emphasis on listening to the customers and incorporating the changes, I strongly believe eCW Greenway, NextGen would not have grown at this pace. Having part of the product mangement and support team offshore, incorporating new ideas provided by us (the customers) are couple major tricks missed by Intergy. I think all is not lost, fresher minds need to take over this wonderful product and approach further development with an open mind.

  17. 17
    SciFi Says:

    My fear with this sale is that Vista will clean up the books, make the core business look pretty and then shop around for a buyer. Who is Intergy’s bread and butter? Small shops, small implementations. Low cost to support in relation to the high revenue they generate. Larger implementations are most likely to be left in the lurch due to the higher R&D dollars they require.

  18. 18
    Hate Manual Entry Says:

    I’d agree with SciFi with cleaning up the business, and shopping it over the next 3-5 years…probably good for all involved. But I would disagree with the small shop high revenue… The larger the site, the more revenue, and easier to implement and support – they have more liklihood of an IT team, a project manager, and an internal help desk vs the small doc shop who has a nurse running clinical and back office with no time to think computers. Think the 80/20 rule. It takes 80 percent of the staff to support the small shops not the other way around. Not just a Vista issue to deal with. R&D spend would likely stay the same to keep up with Meaningful Use and other governtmental drivers. IMHO.

  19. 19
    PACS Eng Says:

    Th downfall of the EMR for Webmd Prac Svcs, then Emdeon, then Sage all began with the loss of Mickey Singer. Bottom line is, the guy was a visionary. He got overtaken by corporate folks who did not have sufficient knowledge or talent necessary to run a Healthcare software business. I know, because I was there for a large portion of the beginning of the end. A good example is that I was moved from a manager who was spot on in his knowledge of the product, technical aspects, and people to a manager that could not tie her shoes with both hands and a flashlight. This was the norm. Putting non quality people in management positions was the first nail in the coffin. RIF’s on half the developers, reliance on a sales force that had little no no understanding of the products, promises to customers that were near impossible based on time/workforce…. I could go on and on. Between the three jumps, they lost or sloughed off some really high quality people. I can only hope that Vista would see the potential and pull the ashes left after the original loss of Michael Singer out of the dust and make it shine again.

  20. 20
    HAS Says:

    I guess everyone knows what has happened now. Micheal Singer settled out of court, I think. It is really hard to find the case, but it is out there. I just feel sorry for the Medical Practices that took advantage of the “Discount” before it was sold.

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