EPS has a 20,000-strong customer base among doctors’ practices in the US, most of which are small or medium-sized businesses of a similar size to Sage’s traditional customers.
Newcastle, UK-based Sage, which already has 7,000 doctors’ practices among its own customer base in the US, now has software covering appointment scheduling, prescriptions and billing, and the creation and management of electronic health records. EPS also offers access to electronic medical transaction services such as those facilitating claims to healthcare insurers.
Elmwood Park, New Jersey-based Emdeaon put EMS up for sale in February along with its business services operation as both had attracted interest from potential buyers. In 2005 revenue increased 2.9% to $304.2m and earnings at the EDITDA level rose 102% to $29.4m.
Sage has been building its presence in vertical markets such as construction, property, and not for profit. It sees considerable growth potential in the doctors’ practice market in the US, which total 200,000. Healthcare has lagged in IT spending and Sage quoted Gartner as estimating that while all sectors spend 4% of revenue on IT, the healthcare sector is only 2.5%.
Sage said many doctors practices are seeking to automate their businesses, both to increase efficiency and to ensure compliance with regulations governing electronic health records, healthcare insurance claims, and medical care documentation. It also said users of practice-management software exhibit high demand for support services.
Sage chief executive Paul Walker said the acquisition would enable it to market its products and services to a substantial new community of small and medium-sized businesses in the US. This acquisition continues our strategy of providing industry-specific solutions, by bringing dedicated Sage solutions to this business sector for the first time, he said.
Emdeon CEO Kevin Cameron said Sage would work closely with Emdeon Business Services and its 85.8% owned subsidiary WebMD Health Corp.
