The rise of HIPAA-certified telehealth
Designed for providers to reach remote or immobile patients and expand their practice, telehealth took on new prominence in the effort to mitigate the spread of COVID-19.
CGM ELVI Telemedicine
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CompuGroup Holding USA, Inc., a 100 % subsidiary of CompuGroup Medical SE & Co. KGaA is acquiring 100 % of eMDs, Inc., based in Austin, TX/USA. Today, CompuGroup Holding USA and MDeverywhere Midco, Inc., USA, the sole indirect shareholder of eMDs, Inc., USA (jointly “eMDs”), have signed an agreement regarding the acquisition of 100 % of the shares in eMDs. The transaction is structured as a reverse triangular merger under U.S. law. eMDs' key products are Ambulatory Information Systems and outsourcing services for medical accounting. With this acquisition, the US subsidiary of CGM significantly broadens its position and will become the top 4 provider in the market for Ambulatory Information Systems in the US. The consideration to be paid to the current shareholders of eMDs is based on an enterprise value of USD 240 million (equal to approx. EUR 203 million), which will be adjusted inter alia for amounts of cash, financial debt and net working capital (compared to a reference amount) as of the closing date. In the fiscal year 2019/2020 (ended 03/31/2020), eMDs had revenues of approximately EUR 81 million and an adjusted EBITDA of approximately EUR 12 million with more than 60,000 healthcare providers.
“The fit with our existing product portfolio is perfect. We have established a solid foundation in the United States in recent years and are already number 2 in the important field of Laboratory Information Systems for Physician Owned Labs (POLs) and Reference Labs,” said Frank Gotthardt, founder and CEO of CompuGroup Medical SE & Co. KGaA. The Germany-based corporation is one of the leading providers for eHealth solutions worldwide. “We are firmly convinced that both CGM and eMDs customers will benefit from this transaction through complementary product strengths.”
Dr. Ralph Körfgen, Managing Director Ambulatory & Pharmacy Information Systems, added: “With one of the largest acquisitions in the history of CGM, we will remarkably increase our installed customer base in the US. At the same time, 1,400 new colleagues will bring along valuable skills and expert knowledge. By combining products and through our planned investment, we will jointly generate high and long-term added value for healthcare professionals.”
“With eMDs we are considerably enhancing our product portfolio in the United States,” said Benedikt Brueckle, CEO, CompuGroup Medical US. “We are acquiring innovative and strongly growing products here, which have recently been recognized with several awards by KLAS. I am looking forward to more than 60,000 healthcare professionals in 32,000 facilities and more than 100 effective distribution partners, who will become an important building block of the CGM success story in the United States."
"With CompuGroup Medical, we have found a partner that understands the US Health IT and technology-enabled services business and shares our goal of market leadership and further driving the digitization of healthcare. We are looking forward to working jointly on innovative eHealth solutions for our common customers," said Derek Pickell, CEO, eMDs.
eMDs’ customer base today consists of more than 60,000 providers in more than 70 disciplines. eMDs is operating in the highly attractive US healthcare IT market that shows a high equipment rate with IT solutions for healthcare professionals. eMDs has more than 1,400 employees at locations in the United States and India.
Closing of the transaction is expected by the end of 2020 and is in particular subject to approvals by the U.S. merger control and investment control authorities.
CompuGroup Medical is one of the leading eHealth companies in the world. With a revenue base of EUR 746 million in 2019, its software products are designed to support all medical and organizational activities in doctors’ offices, pharmacies, laboratories and hospitals. Its information services for all parties involved in the healthcare system and its web-based personal health records contribute towards safer and more efficient healthcare. CompuGroup Medical’s services are based on a unique customer base of more than 1.5 million users, including doctors, dentists, pharmacists and other health professionals in inpatient and outpatient facilities. With locations in 18 countries and products in 56 countries worldwide, CompuGroup Medical is the eHealth company with one of the highest coverages among eHealth service providers. Approximately 6,300 highly qualified employees support customers with innovative solutions for the steadily growing demands of the healthcare system.