Financial analysts who track healthcare technology companies Misys and Allscripts say Misys should have no problem obtaining the $305 million it needs to complete the planned merger with Allscripts.
"The deal is going to get done," said Sean Wieland, an analyst with Piper Jaffray. Bret Jones, an analyst with Leewink Swann LLC, agrees. Barclays likely would step in to provide the financing, he said.
London-based Misys PLC announced Tuesday it would postpone to October 6 a planned September 22 "extraordinary general meeting" to complete the merger of its Raleigh, N.C.-based healthcare unit with Chicago-based Allscripts because officials are unsure of the line of credit they had obtained from Lehman Brothers. Allscripts, too, delayed to October 6 its planned September 22 annual meeting with stockholders.
Lehman Brothers declared Chapter 11 bankruptcy on Monday. On Wednesday, U.K. bank Barclays agreed to a $1.75 billion deal to buy Lehman's core business.
Both Weiland and Jones figure Barclays will take over the deals Lehman Brothers had in place with clients like Misys. Moreover, Misys has what one London analyst called an "ace in the pack" - its 26 percent shareholder ValueAct Capital, which is providing equity financing for the cash portion of the transaction.
"We're not talking a tremendous amount of money," Jones said of the $305 million commitment from Lehman.
Wieland does not view the merger as being at risk.
"Allscripts, if they wanted to have backed out, they could have," he said. Instead, the company issued a news release stating it would continue to support the merger.
"While the events surrounding Lehman Brothers are unfortunate, we nevertheless remain excited about the transactions with Misys and believe they are in the best interests of our stockholders and clients," said Allscripts CEO Glen Tullman.
In Weiland's view, Allscripts is eager for the marketing opportunity that established Misys customers represent.
Weiland downgraded Allscripts stock from to "neutral" a few weeks ago - prompted, he said, by the complexities of the upcoming merger.
"I'm not a big fan of the merger," he said.
The merger would be particularly complex, he said, both in integrating products and culture.
By his count, there are five practice management systems and four electronic health record systems in play.
"It's hard to develop a product plan," Wieland said.
Moreover, Wieland said, the merger really is a three-part merger, since A-4 Health Systems, purchased by Allsripts in 2006, has never been merged.
The planned merger with Misys, announced on March 18, would give London-based Misys Plc a 54.5 percent stake in the combined company, in which Misys Healthcare would be folded into a wholly owned subsidiary of Allscripts.