HBO & Co., an Atlanta-based healthcare information systems and services company, moved into the home healthcare sector by acquiring Management Software, a privately held software vendor, in a deal valued at $48 million.
Shareholders of Springfield, Mo.-based Management Software will receive 890,000 shares of HBO & Co. stock in the transaction, subject to regulatory approval.
On Sept. 6, the day the deal was announced, shares of HBO & Co. stock closed at $56.63, up $3.13, in trading on the NASDAQ system.
The current value of the stock transaction is about three times the annual revenues of the company being acquired.
Management Software has 600 home healthcare customers including about 40 operated by Columbia/HCA Healthcare Corp., the company said. In 1995 it had revenues of $15 million.
The acquisition was completed last week after the signing of a definitive agreement.
The deal was viewed by one Wall Street investment firm as similar to HBO & Co.'s acquisition in May of CyCare Systems, a seller of software and services to physician groups, for $250 million of the company's stock.
New York-based NatWest Securities, in a bulletin following the deal's announcement, said it represented a continuance of HBO & Co.'s strategy of "buying complementary products to be sold into its dominant market share of hospital systems."
Management Software's products "enable a home healthcare nurse to download all relevant patient clinical and financial data prior to seeing the patient in his or her home*.*.*.*on a laptop computer, with all treatment results uploaded to a central computer at the end of the day," NatWest said.
The net result is an increase in the automation of data entry and financial data processing for home care, the firm said.