Veradigm is exploring a sale and appointing a new interim CEO

Brief description of the dive:

• Veradigm is considering a sale or merger months after the health technology company was delisted from the Nasdaq Stock Exchange for failing to comply with financial reporting requirements.

• The company, formerly known as Allscripts, said Tuesday that it is also changing its CEO position again. President and Chief Commercial Officer Tom Langan will assume the role of interim CEO on June 7, following the expiration of the term of current interim CEO Shih-Yin Ho.

• Lee Westerfield, interim chief financial officer who joined the company in December, extended his contract until the end of the year.

Diving Insights:

In late February, Veradigm was delisted from the Nasdaq after failing to file financial reports on time despite repeated warnings from the exchange.

In securities filings, the Chicago-based health care technology company said its financial reports could not be relied upon due to “internal control failures.” Veradigm has not filed annual reports for 2022 and 2023 and is missing quarterly reports for the period from the first quarter of 2023 to the first quarter of this year.

The company recently made a management shake-up amid an investigation into financial reporting. In December, Veradigm removed former CEO Richard Poulton and CFO Leah Jones from their positions, appointing interim replacements.

Veradigm said it has no plans to make permanent executive appointments until a sale, merger or other transaction is considered, and there is no timeline for the search process.

A note from TD Cowen analysts says the decision to consider a sale or merger, as well as Ho’s departure, are surprises.

“The coincidence suggests to us the possibility of submitting an unsolicited offer, which will lead to the Board’s examination of all alternatives,” they wrote.

Although the health care IT company hasn’t released official financial reports, Veradigm’s core business “continues to be strong, profitable and healthy,” said Greg Garrison, the company’s executive chairman.

Veradigm has purchased two companies in recent months, acquiring revenue cycle management company Koha Health in January and health data company ScienceIO in March.

On Tuesday, the company also confirmed its financial forecasts. It expects revenue of $620 million to $635 million in 2024 and adjusted earnings before interest, taxes, depreciation and amortization of $104 million to $113 million.

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