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Ingenix To Acquire Picis

July 21, 2010 News 8 Comments

7-21-2010 8-31-16 PM

Ingenix announced this morning that it will acquire Picis, the Wakefield, MA-based vendor of high-acuity systems for surgery, anesthesia, intensive care, and the emergency department. Terms were not disclosed.

The announcement describes the strategy behind the acquisition:

Ingenix is best known as a leader in health intelligence and analytics throughout the health care system. The combination with Picis significantly strengthens Ingenix’s position in the delivery system, where Ingenix serves nearly 6,000 hospitals in the U.S. with consulting, technology and outsourcing solutions. Picis will extend Ingenix’s capabilities into the high-acuity information systems market.

Ingenix CEO Andy Slavitt was quoted as follows:

This marriage of ‘health intelligence’ and clinical workflow will provide substantial value to patients, physicians and hospitals. Tremendous opportunities exist to use information and technology to modernize the high-acuity area, delivering better care and greater efficiency to these high-volume areas of the hospital, where resource consumption is often at its greatest. Working with Picis’ world-class senior leadership team and talented employees, we believe we can make meaningful change in this critical segment of health care.

I spoke Wednesday morning with Todd Cozzens, Picis CEO and vice-chairman, who explained the rationale behind the acquisition.

”I’m happy with it –  this is a great home for Picis,” he said of Ingenix. “These guys are at the epicenter of what’s happening with healthcare. They know all aspects of reform – data mining and data analytics. Winning the game in reform is about having the best health intelligence. Ingenix has bought into the strategy of hospitals becoming high-acuity centers that need data to drive decisions and to understand the supply chain.”

Cozzens will serve as chief executive of the Ingenix high-acuity business. Most of the Picis management team will transition as well. Operations will remain in Wakefield.

Cozzens says the acquisition was driven by capital requirements. “The minimum market cap to be a serious publicly traded company is now at $1 billion,” he says. “It would have taken 3-4 years for us to get there.”

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Currently there are "8 comments" on this Article:

  1. A few of the acquisitions that we will hear about in the near term is all about survival – this one belongs with the Allscripts/Eclypsis deal – it’s all about having more to offer a potential client so the marriage makes sense for the companies. Will it change the market or interest in Ingenix beyond what the perceptions are today, not in the short term. So will the value be gained by the acquisition, only if they can bring these companies together: products, services, credibility, message of experience of product in the market, all fast enough to be a player in the stimulus spending timeframe. I don’t think any CIO, most of who are risk adverse, are going to jump on this band wagon any time soon.

  2. “The minimum market cap to be a serious publicly traded company is now at $1 billion,” he says. “It would have taken 3-4 years for us to get there.”

    I love M&A nonsense. One of the absuridites of capitalism. Considering that Picis revenues have largely stalled out since the Lynx acquisition and have only grown about $7M over the past 3 years or so (2007-09), it would have taken alot longer than ‘3-4 years’ to be a $1B market cap if they were publicly traded.

  3. This appears to be only a marriage to build critical mass. There’s really no synergy between these two companies for the customer and in my mind, if customers don’t understand the value of the two together, they will perform as if apart.

    It doesn’t appear Ingenix really understands what they want to be when they grow up.

  4. you wont publish this, but you got taken to the cleaners.

    allowing a ‘pre-rumor’ to say “strategy will make sense in 3 to 4 years.

    that was designed so no one would start trashing the acquisition. Well done Ingenix.

    Oh, by the way, have fun selling “High Acuity Systems” in this next 3 years of Meaningful Use. not.

    Cozzens was shrewd, saw this, and got out. pure and simple.

  5. Very smart move by both. This was a hot property on the PE circuit – we bid and lost but we have always admired Picis. Actually their growth this year is 20+% over last year with big traction in all areas and they hit 24% EBITDA. Ingenix is a company to watch – they are going to leverage their capital power. There are some very smart strategicians in both entities and I would not at all bet against them. It will be fun to see old school HIT co’s take potshots and get blindsided. With ED systems now eligible to fulfill 100% of CPOE requirements for MU and new products in the medical necessity area (hottest revenue area on the planet!) plus big orders in surgery, VA, etc. – i.e. I wish our bid made it.

  6. There is no product overlap that I can see although I’m no Ingenix expert. – I’m sure they are investing in their expertise and large customer base so I would bet it’s a platform for future hiring and accelerated investment. Very strong management bench is the buzz about them in our industry. There were some pretty interesting products in the hopper that might get out earlier. Will be interesting to watch.

  7. According to Robert O’Harrow, WaPo, they shill HIT at Harvard, also. Was that included in the new conflict policy?

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