CEGEDIM BECOMES A GLOBAL PLAYER IN ELECTRONIC HEALTH RECORDS BY ACQUIRING PULSE
SYSTEMS, INC., A LEADING US HEALTHCARE SOFTWARE PROVIDER
Paris, July 28, 2010 - Cegedim, a global technology and services company
specializing in the healthcare field, today announced the acquisition of Pulse
Systems, Inc., a leading US healthcare software and services supplier. The move
gives Cegedim access to the US market for the computerization of healthcare
professionals in a very critical time for Electronic Health Records (EHR) and
Practice Management (PM) software market. The Group's Cegedim Healthcare
Software (CHS) division is already one of the leading European publishers of
medical, paramedical and pharmacy management software, with a market share of
119,000 healthcare professionals and over 16,000 pharmacies using its solutions
in seven countries. It will now be a global player.
Considerable opportunities in the US market
The American Recovery and Reinvestment Act (ARRA), the stimulus plan proposed by
President Obama and enacted by Congress in February 2009, provides around $30
billion in incentives for physicians and hospitals to implement EHR solutions.
With the financial incentives set to start flowing in 2011, the market for
equipping physicians with EHR software and services is likely to expand rapidly,
providing a bright outlook for sector companies. According to a 2009
Congressional Budget Office (CBO) study, the penetration rate is likely to rise
from 12% in 2006 to 90% in 2019. Today the rate is 17%, leaving ample room for g
"Pulse provides Cegedim an optimal entry and platform into the rapidly growing
US healthcare computerization market. We expect to capitalize on their superior
healthcare software, vast market knowledge, excellent customer service and
technological prowess to deliver EHR and PM solutions to healthcare pro
fessionals with the best possible chances of success," stated Alain Missoffe,
Chairman of Cegedim Healthcare Software.
Building on the Target Software acquisition in 2005, the Dendrite acquisition in
2007 and the SK&A acquisition earlier this year, this new addition in the US is
squarely in line with the Group's global strategy. It will enable the Group to
leverage its complementary activities in North America and transform its
European Cegedim Healthcare Software division into a global player by utilizing
the Pulse solutions to expand its presence in the US market.
A first-rate acquisition
Founded in 1997, Pulse has developed an extremely sophisticated and scalable
ambulatory healthcare IT solution - Pulse Patient Relationship Management. This
solution includes EHR, PM, e-Prescribing, Revenue Cycle Management services,
The company is based in Wichita, Kansas, with offices in Dallas, Texas, Kansas
City, Missouri and Boston, Massachusetts and has more than 100 employees.
With more than 20,000 workstations installed across the US in 35 specialties,
the company is one of the leading actors in its field.
Pulse Patient Relationship Management has received comprehensive certifications
from different US authorities. It is also ranked among the "Top Vendor
Applications for EHR, PMS and customer satisfaction" in the 2010 survey by the
AC Group, a leading authority in the field. Pulse is also among the seventeen
EHR companies with Surescripts Solution Provider certification for
"Cegedim will provide a capital infusion to leapfrog our industry leading
product portfolio while continuing to focus on superior customer support and on
the performance and high end-user utilization that we have achieved over the
years," stated Alif Hourani, Pulse's Executive Chairman. "In addition, it will
be exciting to leverage Cegedim's intellectual capital from their vast European
EHR experience" he added.
Cegedim will entrust Pulse Systems' continued growth in a rapidly evolving
market to its current management, whose head office will remain in Wichita.
This acquisition is squarely in line with the external growth policy the Group
laid out at the time of its December 2009 capital increase. As a reminder, the
EUR300 million bond issue of 27 July 2010 was intended solely for the purposes
of refinancing existing bank debt.
Pulse's businesses represent estimated annual revenues of around $16 million in
2010 and will make a positive contribution to the Group's consolidated results
from H2 2010 onwards. The company is profitable and will likely continue to grow
in a rapidly expanding sector: it expects to increase its revenues more than
four-fold by 2014.
To allow Pulse Systems to continue its R&D efforts and bolster its sales and
marketing actions, Cegedim will inject $13.5 million into Pulse. The total
amount of the acquisition, excluding capital increase and including a portion in
the form of an additional payment based on growth and profitability targets over
2 years will not exceed $58 million.
The deal was finalized on 27 July 2010 by internal financing and will not
prevent the Group from respecting its debt covenants.
The Group will hold a conference call this evening at 6:00 pm in French and 7:00
pm in English (Paris time) at the following numbers:
* 01 72 30 02 03 from France
* 1616 018 915 (local number) from UK
* 703 62 19 122 (local number) from the US
Access code: 13648531#
Half-year revenues will be released on August 5th 2010, after the stock market
Pulse offers EHR, Practice Management, ePrescribing, and Revenue Cycle
Management (Billing and Collection Services) used nationwide in 35 medical
specialties and subspecialties. Pulse Patient Relationship Management, Version
4.1.02 is a CCHIT Certified(r) 2011 Ambulatory EHR, additionally certified for
Child Health. Since 1997 Pulse has focused on its mission to develop market and
support proprietary and fully integrated healthcare practice workflow solutions
that are easier to purchase, implement, learn, utilize and upgrade.
For more information, visit www.pulseinc.com
About Cegedim Healthcare Software (CHS):
Created in 2009, the Cegedim Healthcare Software Business Unit encompasses nine
Cegedim subsidiaries and more than 1,400 employees in seven countries: France,
the UK, Spain, Italy, Belgium, Tunisia and Chile. The business unit produces
software solutions for healthcare professionals. Pharmacies, general
practitioners, specialists and paramedics - CHS caters to a broad range of
healthcare professionals with a comprehensive range of IT solutions:
- medical and paramedical management (electronic patient files, schedules,
- pharmacy management (sales, inventory, electronic filing),
- publishing the Banque Claude Bernard drugs database (prescription
- installing care networks and Shared Medical Records projects.
Founded in 1969, Cegedim is a global technology and services company
specializing in the healthcare field. Cegedim supplies services, technological
tools, specialized software, data flow management services and databases. Its
offerings are targeted notably at healthcare industries, life sciences
companies, healthcare professionals and insurance companies. The world leader in
life sciences CRM, Cegedim is also one of the leading suppliers of strategic
healthcare industry data. Cegedim employs 8,600 people in more than 80 countries
and generated revenue of EUR874 million in 2009.
Cegedim SA is listed in Paris (EURONEXT: CGM).
To learn more, please visit: www.cegedim.com