Dec 8 2009
QuadraMed® Corporation (NASDAQ:QDHC), a leading provider of
healthcare information technologies and services that help turn quality
care into positive financial outcomes, announced that it has entered
into a definitive merger agreement to be acquired by Francisco Partners,
one of the world’s largest technology-focused private equity firms.
Under the terms of the agreement Francisco Partners has agreed to
acquire all of the outstanding shares of QuadraMed’s common stock for
$8.50 per share in cash and all of the outstanding shares of QuadraMed’s
Series A Cumulative Mandatory Convertible Preferred Stock for $13.7097
per share in cash. The per-share consideration to the Series A Preferred
Stock represents the common-equivalent consideration for such Series A
Preferred Stock based on its current conversion ratio. The all-cash
transaction is valued at approximately $126 million.
The proposed purchase price per share of common stock represents a
premium of approximately 32.6% to the closing share price of QuadraMed’s
common stock on December 7, 2009, the last trading day prior to the
public announcement of the transaction, a premium of approximately 33.3%
to the 30-day trailing average closing price of QuadraMed’s common
stock, and a premium of approximately 7.1% to the 52-week-high closing
price of QuadraMed’s common stock.
Following the unanimous recommendation of a special committee comprised
entirely of independent directors, QuadraMed’s Board of Directors
approved the merger agreement and has recommended that QuadraMed’s
stockholders vote to approve the merger. Piper Jaffray & Co. has acted
as exclusive financial advisor and delivered a fairness opinion to the
Special Committee and to the Board of Directors.
“After a thorough and careful review of the strategic alternatives
available to us, QuadraMed’s special committee and Board of Directors
have concluded that this transaction represents the best option to
maximize value for our shareholders. The Board believes that this
transaction is in the best interest of our shareholders, and is also
beneficial to our customers and partners,” said James E. Peebles,
Chairman of QuadraMed’s Board of Directors. “QuadraMed has a proven
track record of providing software and services that help healthcare
organizations turn quality care into positive financial results.
Francisco Partners is a leading private equity firm that helps
technology companies build on their success. I’m confident that the
Company, fortified by Francisco Partners’ extensive resources, will
continue to build on the impressive legacy of quality products and
services offered to the healthcare industry.”
QuadraMed’s directors and executive officers and affiliates, who control
approximately 8.4% in the aggregate of the outstanding common stock,
have agreed to vote their shares in favor of the transaction, which is
subject to customary closing conditions, including the approval of
QuadraMed’s common stockholders and regulatory approval.
There is no financing condition to the transaction, but Wells Fargo
Foothill, part of Wells Fargo & Company (NYSE: WFC), and Silicon Valley
Bank have committed to provide debt financing for the transaction. The
Company anticipates a stockholder meeting in the first quarter of 2010,
with closing to follow shortly thereafter. QuadraMed plans to maintain
its Reston, Virginia headquarters and operations at its various offices
throughout the United States.
“Francisco Partners brings to QuadraMed extensive resources, expertise
and a proven track record of helping healthcare technology companies
sharpen their strategy and operational execution. Operating as a private
company will also allow us to place more emphasis on generating
long-term value for our clients with less distraction on short-term
results for the public markets,” said Duncan James, QuadraMed’s
president and chief executive officer.
“We look forward to working with Francisco Partners to execute our major
strategic initiatives, which include helping our clients attain ARRA
stimulus funds with the deployment of our award-winning Electronic
Health Record solution (QCPR); assisting healthcare facilities with
their transition from ICD-9 to ICD-10 code sets; and our on-going
investment in the Company’s proven, Care Based Revenue Cycle solutions.”
“We are excited to become part of QuadraMed’s future success with this
acquisition,” said Ezra Perlman, Partner, Francisco Partners. “We
understand the critical role technology plays to drive quality care and
to make healthcare more efficient. QuadraMed has a quality set of
products, an extensive customer base, and a solid market position. We
look forward to supporting Duncan and the Company’s management team as
we go forward together to create long-term value for the Company’s
customers, employees, and stakeholders.”
QuadraMed will represent Francisco Partners’ fifth separate investment
in the healthcare IT industry including current portfolio companies API
Healthcare, AdvancedMD Software, and Healthland, as well as former
company, LYNX Medical Systems, which was acquired by Picis, Inc. in 2007.