R "Ray" Wang
R "Ray" WangNews Analysis: Lawson Software Closes Healthvision Acquisition for $160M, Deepens Healthcare Specialization
Lawson Acquisition Brings Healthcare Focused ERP To Last-Mile Patient Management Solutions
On January 11th, 2010, Lawson Software announced it had closed a $160M all cash offer for Healthvision, a healthcare software solution headquartered in Dallas, TX. The deal continues Lawson's deep commitment to industry verticalization and is notable because the deal:
- Expands Lawson's vertical footprint in the healthcare industry. Lawson currently plays a significant role in the ERP (i.e. financial and human resources) side of healthcare with an estimated 33% market share at hospitals with 250 beds or more. Healthvision plays a complementary role in integrating patient information, enabling the growing healthcare information exchange (HIE) market, and delivering patient care systems for the Canadian market.
Point of view (POV): Operational and clinical data often remain scattered in most healthcare organiztions. With cost savings and compliance top of mind, the Cloverleaf Integration Suite from Healthvision provides a cost effective web services/SOA approach to integration. Users often use Cloverleaf to replace the numerous manual point-to-point integrations. This vertical specialization will place Lawson as an industry expert in integrating business (i.e. ERP) with patient care (i.e. clinical systems). As a result, Lawson will extend its vertical barriers to entry among competitors.
- Enables Lawson to enter the HCIT market. Healthvision boasts 800 customers in 3000 healthcare facilities worldwide. The Medisuite solutions focus on patient management solutions for revenue cycle, clinical care, and data access. The Cloverleaf healthcare data integration solution remains the defacto standard in the provider space. Successful passage of the healthcare reform bill will lead to increased demand for HIE's.
POV (revised 2:oo pm 1/12/2010). : While the Medisuite acquisition may put Lawson directly in competition with some HCIT vendors such as Epic, Meditech, and Siemens in Canada, the goal is to serve as a supplier or glue to clinical vendors on the integration front. HCIT's traditionally have had very proprietary systems that were hard if not impossible to integrate. Lawson has an opportunity to be the "Switzerland" in the integration market. However, if Lawson can adapt MediSuite for the US market, the acquisition will give Lawson a significant accretive growth platform in cross-sell opportunities for an estimated $30B healthcare market opportunity. Expect Cloverleaf to be used to dislodge clunky and proprietary integration tools from existing competitors.
- Provides a significant accretive growth platform. Lawson expects the HealthVision acquisition to bring $60 to $70M additional revenues. The M&A falls in line with Lawson's concerted effort to focus on five key target markets that include fashion, food and beverage, equipment service and rental, public sector, and healthcare.
POV: Over 60% of Healthvision's revenues are recurring. This provides Lawson with a steady cashflow as the vendor trends towards $1B in revenues milestone. Changes in US healthcare policies benefit Lawson in reaching its goals.
The Bottom Line For End Users - Expect More Vertical Focus
Lawson users can expect additional investments in vertical solutions in the next 2 to 3 years. Expect Lawson to continue investing in the Healthvision products with improved integration to Lawson S3. Existing customers should seek an understanding of the future product road maps and time frames for completion. Customers can expect Lawson to be active in cross-sell opportunities.
Your POV
Are you a Healthvision or Lawson customer in healthcare? Always curious to your customer experiences. What do you think of this acquisition? Please post or send on to rwang0 at gmail dot com and we’ll keep your anonymity.
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