Practice Fusion sells for less than it raised
AllScripts yesterday said that it will pay $100 million in cash to acquire Practice Fusion, an early electronic health records company that raised over $200 million in venture capital funding (including at a $700 million valuation in 2014).
What happened: Practice Fusion rival eClinicalWorks last May paid $155 million to settle a suit brought regulators in Vermont, for allegedly misrepresenting the capabilities of its software and paying kickbacks to certain customers in exchange for product promotion. AllScripts notes in an SEC filing that Practice Fusion last March received its own document request from those same Vermont authorities, "pursuant to a civil investigative demand."
But Practice Fusion was having unrelated troubles beforehand, having booted its founding CEO in mid-2015 and focusing on small/mid-sized customers that kept getting scooped up by larger systems that didn't integrate with Practice Fusion (i.e., they sold to the least sticky buyers).