RALEIGH, N.C. – Mike Lawrie, the bluntly speaking new chief executive officer at Misys who is charged with turning around the company, minces no words when it comes to the U.K.-based company’s healthcare operation.
“In Healthcare performance remains poor,” Lawrie said in an earnings announcement on Tuesday, “and we are taking action to address that.”
Investors weren’t immediately impressed. Misys shares traded down 1 percent Tuesday.
Misys Healthcare, which is based in North Raleigh and employs some 800 people, shed two business units on Monday in sales worth more than $400 million.
Reasons for the sale became clear on Tuesday in the earnings release, which noted that revenues for the healthcare unit declined to roughly $568 million from nearly $600 million the year before. Profits decreased to approximately $86 million from $96 million. Profits and revenues were up for the Misys banking division.
It’s no wonder then that Lawrie described Monday’s actions as “disposals” designed to “rebalance our portfolio and enable us to accelerate execution of our strategy.”
Lawrie took over at Misys last October after management at that time failed in a bid to take the company private. Tom Skelton, the CEO of Misys healthcare for six years, left in January. Lawrie had been especially critical of the Healthcare business unit’s performance, calling results “unacceptable.”
The sale of the business units, which are based in Arizona and California, will enable Misys to focus on higher profit margin operations in what Misys calls the “connected community market” of data services linking doctors, practices and hospitals.
“In Healthcare, the strategy is based on both focus and differentiation, concentrating on the higher growth ambulatory and connected communities segment of the healthcare market,” Lawrie said Tuesday. “We are realigning the business to better position it to execute the strategy, reduce costs and maintain margins. We have announced the sale of our hospital systems businesses and are focusing our resources in the ambulatory segment where we have core competencies and a huge installed base of physician customers.
Vista Equity Partners is buying the Misys Healthcare diagnostic information business for $381.5 million. The unit is based in Arizona and employs some 750 people.
QuadraMed Corporation, meanwhile, will pay $33 million for the Misys CPR business unit. The CPR group operates in San Bernardino, Calif., and employs 50 people.
What impact the sales will have on the remaining Raleigh operation is not clear other than allowing it to focus on healthcare data, Misys spokesperson Mike Holsinger told WRAL Local Tech Wire on Monday.
“We do have people doing works on those projects,” Holsinger said. “As we come to a close on the deals there may be some more changes.”