Allscripts Health Solutions Inc., a provider of electronic health records, fired its chief executive officer of more than a decade and said the company no longer plans to sell itself. The shares fell as much as 19 percent.
Glen Tullman, who joined Allscripts in 1997 and was the CEO since the company first sold shares to the public in July 1999, was terminated without cause, Chicago-based Allscripts said in a regulatory filing. He was replaced by Paul Black, 54, a current board member and former chief operating officer of Cerner Corp., a competing health-care information company.
Allscripts began seeking a sale after a board upheaval and shareholder lawsuit earlier this year that questioned its leadership. In September, the company lost a bid for a $302 million contract from New York City’s public hospitals and last month reported third-quarter revenue declined.
“We view the management changes positively,” Steven Halper, an analyst at Lazard Capital Markets, wrote yesterday in a note to clients. The move makes a sale of the company “unlikely,” he wrote.
Allscripts declined 16 percent to $8.97 at 8:47 a.m. New York time, after falling to $8.68. The company had dropped 44 percent this year through yesterday.
The company, with a market value of about $1.9 billion, had received bids from private equity firms, including Blackstone Group LP, Carlyle Group LP and Silver Lake Management LLC, Bloomberg News reported Oct. 8. Allscripts said it hired Citigroup Inc. to advise it.
“The board concluded, however, that the best course at this time is to develop Allscripts’ long-term potential under the direction of our new management team,” Dennis Chookaszian, the board chairman, said yesterday in a company statement announcing the changes.
Allscripts has struggled since its acquisition of Eclipsys Corp. in 2010, a purchase intended to bolster the sale of technology to hospitals. The combination promised to take advantage of the 2009 U.S. economic stimulus law allotting $27.4 million to help health-care providers buy electronic records systems.
Instead, Allscripts said in April that customers had delayed commitments during the merger, waiting for new releases of the company’s software. On April 26, the company revealed a board dispute that led to the firing of its then-chairman, Phil Pead, and the departure of three directors.
In addition to Tullman’s departure, Allscripts said Lee Shapiro, the company president, was fired and will serve as a consultant to Black for as long as six months.
Black worked at Cerner, a Kansas City, Missouri-based health-care information technology company, for more than 12 years. He was recently an operating executive with Genstar Capital LLC, a private equity firm, responsible for its health- care and software practices, Allscripts said in the statement.
“Paul possesses a unique blend of operational, health-care and IT sector expertise, and we are pleased that he has agreed to lead the company at this critical juncture,” Chookaszian said.