CompuGroup Medical strengthens US business with second largest acquisition in company history

Press release, November 23, 2020

CompuGroup Medical strengthens US business with second largest acquisition in company history

  • CompuGroup Medical (CGM) is growing its US business by acquiring eMDs, Inc. (eMDs), a leading provider of healthcare IT with a focus on doctors’ practices in the US, reaching a relevant size in the biggest healthcare market worldwide
  • CGM, currently # 1 in Europe for Ambulatory Information Systems and #2 in the US for Laboratory Information Systems, also rises to be # 4 for Ambulatory Information Systems based on the number independent doctors’ practices in the largest eHealth market worldwide
  • CGM is building an attractive platform for future growth through complementary product portfolios and the ability to provide comprehensive solutions for doctors’ practices
  • Both CGM and eMDs customers will benefit from the transaction
  • CGM has planned significant investments to strengthen organic growth

Koblenz. CompuGroup Medical SE & Co. KGaA is acquiring 100 % of eMDs, Inc., based in Austin, TX/USA. Today, CompuGroup Holding USA, Inc., a 100 % subsidiary of CompuGroup Medical SE & Co. KGaA, and eMDs have signed an agreement regarding the acquisition of 100 % of the shares in eMDs. The transaction is structured as a reverse triangular merger under U.S. law. eMDs’ key products are Ambulatory Information Systems and outsourcing services for medical accounting. With this acquisition, CGM significantly strengthens its position in the US and will become the top 4 provider in the current core competence field of Ambulatory Information Systems based on the number of independent doctors’ practices that are not part of a hospital. The consideration to be paid to the current shareholders of eMDs is based on an enterprise value of USD 230 million (equal to approx. EUR 195 million), which will be adjusted inter alia for amounts of cash and financial debt as of the closing date. In the fiscal year 2019/2020 year (ended 2020/03/31), eMDs had revenues of approximately EUR 81 million and an adjusted EBITDA of approximately EUR 12 million with more than 60.000 healthcare providers.

“The fit with our existing product portfolio is perfect. We have established a solid foundation in the United States in recent years and are already number 2 in the important field of Laboratory Information Systems for Physician Owned Labs (POLs) and Reference Labs,” said Frank Gotthardt, founder and CEO of CompuGroup Medical SE & Co. KGaA. The Germany-based corporation is one of the leading providers for eHealth solutions worldwide. “We are firmly convinced that both CGM and eMDs customers will benefit from this transaction through complementary product strengths.”

Dr. Ralph Körfgen, Managing Director Ambulatory & Pharmacy Information Systems, added: “With the second largest acquisition in the history of CGM, we will remarkably increase our installed customer base in the US. At the same time, 1,400 new colleagues will bring along valuable skills and expert knowledge. By combining products and through our planned investment, we will jointly generate high and long-term added value for healthcare professionals.”

“With eMDs we are considerably enhancing our product portfolio in the United States,” said Benedikt Brückle, Senior Vice President USA & Canada. “We are acquiring innovative and strongly growing products here, which have recently been recognized with several awards by KLAS. I am looking forward to more than 60,000 healthcare professionals in 32,000 facilities and more than 100 effective distribution partners, who will become an important building block of the CGM success story in the United States.”

“With CompuGroup Medical, we have found a partner that understands the US Health IT and technology-enabled services business and shares our goal of market leadership and further driving the digitization of healthcare.  We are looking forward to working jointly on innovative eHealth solutions for our common customers,” said Derek Pickell, CEO eMDs.

eMDs’ customer base today consists of more than 60,000 providers in more than 70 disciplines. eMDs is operating in the highly attractive US healthcare IT market that shows a high equipment rate with IT solutions for healthcare professionals. eMDs has more than 1,400 employees at locations in the United States and India.

Closing of the transaction is expected by the end of 2020 and is in particular subject to approvals by the U.S. merger control and investment control authorities.

About CompuGroup Medical SE & Co. KGaA
CompuGroup Medical is one of the leading eHealth companies in the world. With a revenue base of EUR 746 million in 2019, its software products are designed to support all medical and organizational activities in doctors’ offices, pharmacies, laboratories and hospitals. Its information services for all parties involved in the healthcare system and its web-based personal health records contribute towards safer and more efficient healthcare. CompuGroup Medical’s services are based on a unique customer base of more than 1.5 million users, including doctors, dentists, pharmacists and other health professionals in inpatient and outpatient facilities. With locations in 18 countries and products in 56 countries worldwide, CompuGroup Medical is the eHealth company with one of the highest coverages among eHealth service providers. Approximately 6,300 highly qualified employees support customers with innovative solutions for the steadily growing demands of the healthcare system.

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