Telus Health has announced that it has entered into an agreement to acquire the Canadian business of Nightingale Informatix Corp., including its proprietary EMR software solutions and related assets.
Nightingale currently provides its EMR solution to 4,000 physicians in Canada, mainly in Ontario and the Atlantic provinces. The acquisition of Nightingale’s Canadian operations is subject to customary closing conditions, including Nightingale shareholder approval and regulatory approval.
“At Telus Health, we are on a mission to leverage the power of technology and our world-class telecommunications infrastructure to improve health outcomes for Canadians,” said Paul Lepage (pictured), president, Telus Health. “We are working to realize our goal not only by continuing to invest in health technology that supports the primary care ecosystem, but also through strategic acquisitions.”
The $14-million acquisition of Nightingale by Telus Health is a positive development for QHR, says Paradigm Capital analyst Christopher Lam.
“Telus Health is Canada’s most established provider of health information technology solutions,” said Nightingale CEO Sam Chebib. “We share their vision for innovation, continuous improvement and the critical role technology continues to play in evolving the healthcare system in Canada. “Our customers can look forward to taking advantage of Telus Health’s wide range of products and expertise, backed by a world-leading telecommunications infrastructure.”
Lam says despite the fact that QHR sat this one out it will likely end up winning because much of Nightingale’s customer base may eventually become QHR customers, especially considering the recently proposed agreement between Telus and QHR to cross-sell products.
“As we have stated previously, we did not expect QHR to be a serious bidder for Nightingale given NGH’s significant cash burn and heavy debt burden,” says Lam. “Based on our viable customer estimate of 2,100 physicians and a 50% retention rate, Nightingale was only worth $3.75M to QHR. Nightingale was the third-largest EMR provider (behind QHR and Telus) in Canada by doctor count and we expect significant customer churn as a result of this deal. We believe Telus will eventually consolidate its multiple EMR platforms and do not think the Nightingale system will be chosen as the lead product. As such, we expect Nightingale customers to start shopping now for a longer-term solution like QHR.
Disclosure: Cantech Letter’s Nick Waddell owns shares of QHR.