Veradigm Exploring Sale, Names New Interim CEO

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Dive Brief:

• Veradigm is exploring a sale or merger, months after the healthcare technology company was delisted from Nasdaq for failing to comply with financial reporting requirements. 
• The company, formerly known as Allscripts, said Tuesday it’s also changing up its chief executive post — again. President and Chief Commercial Officer Tom Langan will assume the interim CEO role on June 7, after the current interim chief Shih-Yin Ho’s term of service expires. 
• Lee Westerfield, the interim chief financial officer who joined the company in December, extended his contract until the end of the year. 

Dive Insight:

Veradigm was delisted from Nasdaq in late February, after failing to file timely financial reports despite repeated warnings from the stock exchange.

In securities filings, the Chicago-based healthcare technology company said its financial reports couldn’t be relied upon due to “internal control failures.” Veradigm hasn’t filed its annual reports for 2022 or 2023, and it’s missing quarterly reports from the first quarter in 2023 through the first quarter this year.

The company recently shook up its leadership suite amid the financial reporting investigation. Veradigm removed its former CEO Richard Poulton and CFO Leah Jones from their posts in December, appointing interim replacements. 

Veradigm said it doesn’t plan to make any permanent executive appointments while it considers a sale, merger or other transaction, and it doesn’t have a timeline for the exploration process.

The decision to look into a sale or merger — as well as Ho’s departure — are surprises, according to a note from TD Cowen analysts. 

“The combination of events suggests to us the possibility of an unsolicited bid leading the Board to explore all the alternatives,” they wrote. 

Though the healthcare IT firm hasn’t issued official financial reports, Veradigm’s core business “continues to be strong, profitable and healthy,” said Greg Garrison, the company’s executive chairman.

Veradigm has purchased two companies in recent months, acquiring revenue cycle management company Koha Health in January and healthcare data firm ScienceIO in March. 

The company also reaffirmed its financial guidance Tuesday. It expects revenue between $620 million and $635 million for 2024, and adjusted earnings before interest, taxes, depreciation, and amortization between $104 million and $113 million.