Premier, a Charlotte, N.C.-based group purchasing and performance improvement company, has acquired yet another technology company, the second in just a week.
The publicly traded firm acquired Healthcare Insights, a Libertyville, Ill.-based developer of financial management software that helps hospitals with budgeting, forecasting, labor productivity and cost analytics. Premier paid $65 million in cash for the acquisition, which was effective July 31 but announced on Wednesday.
Just last week, Premier acquired CECity, a Pittsburgh-based analytics software vendor, for $400 million. Premier said CECity would allow it to expand its efforts to serve physician practices and professional organizations.
Eric Coldwell, an analyst with Robert W. Baird & Co., said some investors may see the the M&A activity as a means to fill a hole in the company's guidance. Coldwell, however, says the acquisitions are central to Premier's strategy.
Software subscriptions are an increasingly important revenue source for Premier, and the company's acquisition trail shows it. Late last year, it acquired TheraDoc, a Hospira subsidiary that develops clinical surveillance technology.
Now, with the acquisition of Healthcare Insights, Premier will add clinical financial management and productivity analytics to its existing cost and quality applications, allowing it to have a more complete enterprise resource planning solution. The deal also brings new customers: 49 of Healthcare Insights' 94 health system customers do not have an existing relationship with Premier.
“It is not enough to have financial, operational and clinical data,” Keith Figlioli, Premier senior vice president of health informatics, said in a statement. “Health systems must understand how to translate that information into effective cost-containment strategies, as well as superior clinical outcomes.”
The deal is expected to be “modestly accretive” to Premier's fiscal 2016 revenue growth, the company said. Premier will announce the expected impact when it reports its earnings and fiscal 2016 guidance on Aug. 24.
