Health data company Veradigm said this morning it is exploring a sale, merger or some other business combination and will replace CEO Dr. Yin Ho when her contract term expires on June 7.
Chicago-based Veradigm, formerly Allscripts, was delisted from the Nasdaq stock exchange earlier this year, but this morning reaffirmed the positive fiscal year 2024 guidance it gave in March and called its core business "strong, profitable and healthy" in a press release.
Related: Veradigm to acquire AI company for $140M as it preps for delisting
Nevertheless, it is replacing leadership and seeking a buyer or business combination.
Ho will be replaced Tom Langan, the company's president and chief commercial officer, who will become the interim chief executive officer and report directly to Executive Chairman Greg Garrison, a separate press release said. Langan has been with the company since 2018.
Interim Chief Financial Officer Lee Westerfield, brought in back in December 2023, after financial reporting mistakes led the company to pull back quarterly and annual U.S. Securities & Exchange Commission filings, has agreed to stay on with Veradigm through Dec. 31, the company said.
Veradigm does not plan to make permanent executive appointments while it explores strategic alternatives, the press release said.
“Veradigm has built a unique set of assets in the healthcare industry, including a high-quality data and technology platform that spans providers, payers and life sciences companies. We have added in-house, health care-specific generative AI capabilities to create new and exciting lines of business. These efforts complement our core business, which continues to be strong, profitable and healthy,” said Garrison. “The board of Veradigm is exploring alternatives to drive our growth strategy and maximize shareholder value. The company will remain focused on serving our customers, supporting our employees and growing our business.”
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On Feb. 27, Veradigm announced its board adopted a stockholder rights plan similar to plans adopted by other publicly traded companies to protect it from a takeover bid, because the board determined the delisting made it "particularly vulnerable to a creeping acquisition of actual or de facto control."
Following a software problem that caused its 2022 revenue figures to be overstated, Veradigm has been unable to file its 2022 10-K annual report and its 10-Q reports for the quarters ended March 31, June 30 and Sept. 30, 2023, but is "working diligently" to fix and file the reports, the company said in February.
That same month, around the time of its delisting, the company announced it would buy health care artificial intelligence company ScienceIO for $140 million in cash.
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On March 13, it provided guidance that it expected Fiscal Year 2024 revenue to be between $620 million and $635 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) between $104 million and $113 million. At the time it said it has cash and cash equivalents of approximately $343 million, funded debt of $208 million and net cash of $135 million. Veradigm reaffirmed that guidance this morning.
Veradigm's over-the-counter stock price was listed at $7.55 at 4 p.m. EST on May 24. The stock was down 29.77% from one year ago.
This story first appeared in Crain's Chicago Business.
