It’s been on the market for all of this year and much of 2000, but the Amisys 3000 healthcare package so successful on HP e3000s has finally been sold along with its makers. The Payor Solutions Group of McKesson HBOC was purchased in early June by Platinum Equity, a multi-billion conglomerate in businesses as diverse as software, telephone billing and voice response. The company had already purchased three other acquisitions this year — Gupta Technologies, Claricom and Nextira — whose combined revenue was $1.7 billion, according to a Platinum press release.

The Amisys business will be operated alongside the existing payor business group of Platinum, and will be established as the standalone entity Amisys LLC. The Limited Liability Company will also include the assets and operations of Pathways Managed Care, another of the McKessonHBOC properties which Platinum purchased. Platinum signed an agreement on June 6 to acquire the product groups from the Information Technology Business of McKessonHBOC. Terms of the agreement were not disclosed.
Platinum recognizes the value of the software company it has purchased. The company’s press release on the acquisition states that “AMISYS serves one of the largest installed client bases in the industry, including commercial, Medicaid and Medicare HMOs, indemnity insurers, physician hospital organizations, third-party administrators and other specialty managed care organizations.” Platinum is also already holding an HP e3000-driven business in Billing Concepts, the largest third party billing company for the “10-10” long distance firms in North America.

Platinum already operates several entities in the healthcare and risk management sectors including Synertech Health System Solutions, a 1998 healthcare ASP acquisition that offers administrative outsourcing, processing, hosting and consulting services. Platinum officials described their newest acquistion as products which “have loyal customers and historically have had high customer retention rates.” Tom T. Gores, Platinum Equity president and CEO, stated, “This acquisition enhances Platinum Equity’s growing portfolio of health care technology businesses. We see this as a strategic complement to Synertech Health System Solutions that will drive enhancements to the payor market through the flexible and high-functioning profiles of the products. As with each of our acquisitions, the employees and customers will benefit from our commitment to the business.”

Platinum integrates its acquisitions on a schedule that might be compared to the practices of Computer Associates: make as much change as you can as soon as the deal is signed. It says its “Differentiating Business Practices” include methods that “generally refocus an acquired company within the first 90 days —putting the operations, technology and marketing plans in place to better position a company within the marketplace. The company takes a "managed entrepreneurship" approach with each of its acquisitions — after the strategy is worked out with an acquired company and the business plans are in place, Platinum Equity empowers companies to manage the day-to-day operations. Platinum Equity sets a goal to improve the value of acquired companies in less than twelve months — all companies are performing better today than at date of acquisition.”

Amisys has been under pressure to reorganize for some time, stemming from the about-face which McKessonHBOC did last year to walk away from developing a non-3000 version of its Amisys3000 software. Sales slumped with an absence of open software product to sell, and the lack of emphasis away from the company’s MPE heartland drew away technical and managerial talent. Once the 3000 mission was re-embraced in 2000, the company had to face the declining financial climate in healthcare while it started to funnel resources back into a dormant MPE development plan. McKessonHBOC had the Payor Solutions Group in play since last summer, trying to improve a corporate financial picture with sales of some key assets. While sales of new installations of Amisys3000 have been rare, by many accounts there’s a strong support revenue stream, and Platinum sees the alliance with its ASP business as having good potential for business growth. Synertech supports a multi-million-membership base, customers that do business in the commercial, Medicaid and Medicare markets, including new delivery models such as defined contribution plans.

Steve Rock, Platinum Equity senior vice president of health care operations and CEO of Synertech commented, "The AMISYS and Pathways Managed Care businesses represent a strategically-driven opportunity for Platinum Equity to capitalize on these products' strengths, and maximize potential in the managed care information technology market. Over time, we will leverage the strengths of AMISYS, LLC, to better support and serve customers, and we will use the collective expertise of Synertech and AMISYS, LLC to take advantage of the many opportunities that exist in the health care payor-systems market.''

The combined company will have more than 200 employees. AMISYS, LLC will continue to operate from its HP e3000 locations in Rockville, Md., and the business offices in Atlanta, Ga. as well as the Pathways offices in Dubuque, Ia. The transaction is expected to close during the third calendar quarter.