NDCHealth to Be Acquired by Per-Se for $1B

NEW YORK/LONDON – Healthcare software developer NDCHealth Corp. (NDC) said on Monday it would be acquired by rival Per-Se Technologies (PSTI), with a portion of the business spun off to Dutch publisher Wolters Kluwer (search) in a combined transaction of about $1 billion.

Per-Se will acquire most of Atlanta-based NDCHealth, including the physician, hospital and retail pharmacy businesses, for about $665 million, including the refinancing of NDCHealth's outstanding debt at closing, currently about $270 million.

Separately, Wolters Kluwer, based in Amsterdam, will buy the pharmaceutical information management business from NDCHealth for $382 million in cash. The unit will become part of its Health division's pharma solutions unit.

The combined transaction, after income taxes, debt refinancing and transaction costs, will result in compensation to NDCHealth's shareholders of $19.50 per share, with at least $13.00 paid in cash and up to $6.50 paid in Per-Se stock, in an arrangement to be determined by Per-Se and to be announced prior to the shareholder meetings.

NDCHealth shares rose $1.12, or 6.3 percent, to $18.89. Per-Se Technologies fell a 29 cents to $19.75 or 1.5 percent while Wolters Kluwer shares in Amsterdam were up 0.59 percent at 15.28 euros.

NDCHealth, which develops software for the health care industry, earlier this year announced it was considering strategic options. The company recently restated two years of earnings and is the subject of an investigation by the Securities and Exchange Commission.

Analysts said the multiple that Wolters Kluwer paid was reasonable compared with multiples paid in the sector recently.

"Strategically this acquisition is a nice fit, while the multiples paid by Wolters are below those paid by VNU for IMS Health," brokerage Petercam said in a research note.

For Wolters Kluwer, the deal is its largest under Chief Executive Nancy McKinstry, who took over in 2003 after a decade-long acquisition spree transformed a small Dutch education house into a global publisher.

Buying and integrating more than 300 companies eventually exhausted the company's cashflow, however, and distracted it as its rivals pushed ahead into electronic publishing, leaving it trailing during a key industry transformation.

Wolters Kluwer said the deal values the business at 10.5 times adjusted earnings before interest, taxes, depreciation and amortization, and restructuring costs.

Wolters Kluwer said it expected cost savings in general and in administrative functions and that the deal would add 3 cents to ordinary earnings per share in 2006.