Two more Atlanta-based health IT companies sold off this week.
Chamberlin-Edmonds, which produces software on Medicare eligibility for hospitals, fetched $260 million from Emdeon of Nashville, a medical payments company. CardioMEMS, which makes wireless heart implants, fetched $60 million for a 19% stake, with an option to sell out for $375 million, from St. Jude Medical, a pacemaker company.
This follows closely on the completion of Eclipsys’ sale to Allscripts, the Chicago-based EMR company, and the $66 million deal to sell A.D.A.M., a health content provider, to Ebix. The only exceptional point is the last deal, where the buyer is also based in Atlanta.
(One local sports team won its athletic competition last night. So here is their logo. All these deals mean there are more local millionaires who can put money into sports teams.)
Having lived in and reported on Atlanta business for almost three decades, I can call these deals typical of what happens when a technology niche starts to mature. PC parts outfits, software outfits, and other tech companies start well in Atlanta, but few stay the course to achieve leadership in a mature market on their own.
Consolidation is an important stage for any industry. It’s where a lot of the big money is made. The deals above represent over $1 billion heading into the pockets of Atlanta-based entrepreneurs and the venture capitalists who backed them.
For the industry it means success is now more certain than before. As the number of players in an industry comes down, profit margins often stabilize. Buyers and sellers gain a greater understanding of the new industry’s folkways.
So it is with health IT.
