Misys and Healtheon Form Internet Healthcare Alliance

Misys, a computer software and services company, saw its shares jump 16 percent after forming an alliance with Healtheon, a pioneering US healthcare web company. The collaboration will create a dominant internet healthcare and e-commerce portal, giving users easy access to healthcare services online. This strategic move is expected to merge with WebMD, an online medical content provider, and is valued at $5.5 billion.

Key Takeaways:

• Misys' shares increased by 16 percent following the announcement of the internet alliance with Healtheon.
• The alliance aims to create a dominant internet healthcare and e-commerce portal, allowing users to navigate healthcare services online.
• Healtheon will use Misys' management systems and clinical software, developed by Medic Computer Systems, a wholly owned US subsidiary of Misys, as part of its internet offering.
• The service will enable doctors to carry out various business transactions online, such as checking patients' insurance coverage and obtaining lab results electronically.
• Healtheon and Medic will share revenues earned from internet-based transactions and aim to develop additional internet-based healthcare services.
• Misys will receive an equity stake of up to 4.4 million shares in Healtheon, exercisable over four years if performance targets are hit.
• An analyst noted that the deal has tremendous potential for Misys to expand and cross-sell IT services, and will be a "huge branding exercise" for the company, raising its visibility in the US.

Statistics:

• Misys' shares increased by 751/2p to 571p.
• The alliance aims to merge with WebMD, an online medical content provider.
• The new entity is expected to be valued at $5.5 billion ($3.35 million).
• Medic Computer Systems has an installed base of about 65,000 doctors in the US.
• Misys has a stake in the ambitious project to create a dominant internet healthcare and e-commerce portal.

Sources:

• Financial Times Limited, 1999.