HEALTHCARE AT HOME:
THE  ROWAN TECHNOLOGY REPORT

Serving the home health, home care and hospice industry since 1999.

London & Chicago, March 18, 2008 — In one of the more complex corporate transactions in recent memory, home care and physician practice software developer Misys Healthcare LLC, a wholly-owned subsidiary of London-based banking conglomerate Misys Plc (FTSE: MSY.L), has signed what a March 18 announcement characterizes as a merger agreement with Chicago-based physician practice software provider Allscripts (Nasdaq:MDRX).

According to the March 18 press release and follow-up investor conference call, the two companies announced that Misys Healthcare LLC, with offices in Raleigh, North Carolina, enters the merger via a $330 million cash contribution from Misys Plc, its London-based parent company. For its investment, Misys Plc receives a majority ownership position, 54.5%, in the combined companies.

The new company will be known initially as "Allscripts-Misys Healthcare" and will be operated as a wholly-owned subsidiary of Allscripts, which in turn will become a wholly-owned subsidiary of Misys Plc.

Apparently, the British parent will complete the Allscripts purchase with borrowed funds. According to the official release, "Misys has received a firm commitment from Lehman Brothers to provide debt financing, and an underwriting commitment from ValueAct Capital Master Fund L.P. to provide equity financing for the cash portion of the transaction, both of which are subject to customary conditions. ValueAct has committed to voting in favor of the transaction. The transaction is not conditioned on financing and is expected to close in the next four to six months."

Allscripts will then turn around and pay stockholders of record the same total, $330 million, or approximately $4.90 per share, in the form of a special cash dividend the day before the merger closes. Stockholders will retain currently held shares. Misys posted approximately $376 in revenues and $39.5 million in profit for its 2007 fiscal year, June 1, 2006 to May 31, 2007. Allscripts figures were not made available.

The Allscripts press release speaks exclusively of the company's increased influence in the "overall healthcare information technology sector." It talks about the merger creating "an industry leader in the growing electronic health records (EHR) and practice management (PM) markets." The release goes on to say "the combined company will have a client base of approximately 150,000 U.S. physicians and 700 hospitals and will be uniquely positioned to help physicians provide better patient care, manage their business more effectively and connect with their patients and other key healthcare stakeholders."

What is not mentioned anywhere in the document are the words "home care." The only exception is in the customary "About Misys" closing paragraph: "In healthcare, Misys is a market leader, serving more than 110,000 physicians in 18,000 practice locations and 600 home care providers."

Optimism from the top
As is typical in such official press releases involving publicly-traded companies, there is more information about the financial structure of the deal than the ultimate effect on products, employees and customers. So we spoke with Misys Healthcare home care division president Gary Larson on Wednesday to fill in those blanks. According to Larson, many of the details will evolve between now and the final closing date but he regards the merger as a positive for his division and its customers.

"We are now part of an organization that serves one out of every three U.S. physician practices," he explained. "The new access our home care clients will enjoy to physician EMR systems will be unparalleled." He added that he spent much of the first 36 hours following the announcement on the phone with Misys home care customers, thinking he would be reassuring them but pleased to find out they were positive about the news as well.

Additional synchronicity will be available from another recent Allscripts acquisition, which was completed days before the 2008 HIMSS conference, February 24-28. ECIN provides automated electronic referrals from hospitals to post acute care providers. The Palm Harbor, Florida company has over 1,500 home care agencies already using its software to receive and respond to electronic referrals, eliminating the need for intake staff to re-key patient data. Besides Misys, ECIN also has software integrations with McKesson and HealthMEDX.

Describing the ECIN product, "Core System Integration," Misys customer Musood Pirzada, IT Director for the Cleveland Clinic explained, "[It]...allows our intake department to receiveaccurate demographic and financialinformation from the e-referral directly intoour main operating systems. This abilityto avoid the re-keying of these data fieldssaves 10 to 15 minutes of manual dataentry per patient and allows us to make aquicker determination on the acceptanceof the patient."

Combined Chicago-Raleigh leadership planned
The current Allscripts management team will share leadership with Misys executives but continue with the combined company under their current titles. CEO Glen Tullman and CFO Bill Davis will carry on with those duties and Misys CEO Mike Lawrie will serve as Executive Chairman of the new Board of Directors. The board will have 10 members, Lawrie and Tullman plus five directors nominated by Misys and three by Allscripts.

Headquarters will be at Allscripts' Chicago offices, though Larson indicated there has been no talk of Misys leaving Raleigh. "We have a substantial number of employees here and beautiful new facility," he told HCAR. "Plus, we understand Allscripts has a presence in our area as well." The combined company will start with over 3,700 employees and trade on the NASDAQ exchange under Allscripts' existing MDRX symbol.

Misys CEO Mike Lawrie called Allscripts "the perfect partner" and said the two companies share highly compatible cultures. "We all look forward to working with Glen Tullman and his team to deliver on the tremendous potential of the combined company," Lawrie said. Cost synergies, corporate code for personnel redundancy elimination, are expected to reach annual pre-tax totals of between $15 and $20 million in the first full year following the close of the transaction, increasing to $25 to $30 million in the years that follow.

The transaction is subject to approval of the merger agreement by Misys shareholders, approval by Allscripts shareholders of the issuance of shares in the transaction and certain amendments to Allscripts charter and bylaws, regulatory approvals and customary closing conditions.

Replay of a March 18 joint conference call is available by dialing 866-247-4222 from within the United States or +44 (0) 1452 550 000 from outside the U.S. The passcode for the replay is 39947975. A slide presentation is also available at http://investor.allscripts.com.