NASHVILLE, Tenn.--(BUSINESS WIRE)--
HealthStream, Inc. (NASDAQ: HSTM), a leading provider of workforce
development, patient experience, and provider solutions for the
healthcare industry, today announced that it has acquired Morrisey
Associates, Inc., a Chicago-based subsidiary of Morrisey Holdings, Inc.
Through this transaction, HealthStream's Provider Solutions segment
gains a wide array of market leading products for credentialing and
privileging healthcare professionals, adding to its Echo line of
solutions. HealthStream's innovative approach to talent management
supports healthcare organizations' needs to manage their workforce along
multiple dimensions, including the management of their qualifications
and competencies. The acquisition of Morrisey Associates further enables
HealthStream to provide an expanded solution set for both of these needs.
"Ensuring that you have qualified healthcare providers is the first step
for all healthcare organizations in delivering quality care to
patients—and that's why we are committed to offering the best provider
solutions in the healthcare industry," said Robert A. Frist, Jr., chief
executive officer, HealthStream. "With the acquisition of Morrisey
Associates, HealthStream gains an expanded source of market leading
credentialing and privileging solutions, delivering important synergies
for innovation in this key area of healthcare organizations' workforce
requirements."
Hospitals are responsible for ensuring the highest quality of care
possible for patients and, therefore, credentialing is mandatory.
Credentialing is the process by which hospitals evaluate and verify the
qualifications of their healthcare providers to ensure that each
practitioner possesses the necessary qualifications to provide medical
services to patients. Once a practitioner is credentialed, the hospital
will assess his/her competencies in a specific area of patient care
through a process known as privileging. The Joint Commission requires
ongoing, periodic assessments of practitioners' competencies and
performance for maintaining accreditation. The acquisition of Morrisey
Associates adds to our products that support every step in these
processes.
MSO for the Web™ (MSOW), Morrisey Associates' Web-based provider
credentialing software, streamlines the entire credentialing process,
from onboarding through reappointment, by eliminating paper-based,
manual administrative tasks. It automates online applications, primary
source verifications, contract and network management, credentialing
packet reviews, and peer reviews. Also, Morrisey Associates' Privilege
Content and Criteria Builder™ (PCCB) helps healthcare organizations
verify that clinical practitioners are qualified to perform specific
procedures using a robust criteria-based system. Morrisey Associates
offers a comprehensive, vetted library of delineated privileges for more
than 100 adult and pediatric specialties, encompassing physicians,
advanced practice allied health professionals, and non-physician
specialties. Hospitals also receive a list of stand-alone privileges and
procedures that may be available for one or more specialties.
As president of HealthStream's provider solutions business, Michael
Sousa will assume executive leadership of Morrisey Associates, a
HealthStream Company. "I look forward to welcoming Morrisey Associates'
customers and employees to HealthStream," said Michael Sousa. "We are
excited that our portfolio of provider solutions now includes MSOW,
PCCB, and the experienced consulting team from Morrisey Associates. We
believe that the expertise, resources, and capabilities of HealthStream,
Echo, and now Morrisey Associates will combine to deliver innovation
that yields the most advanced platform, proprietary content, and
validated data to accelerate and optimize medical staff credentialing
and privileging for hospitals."
"As the founder of Morrisey Associates, I have always been committed to
providing superior products and services to help our customers deliver
excellent patient care," said Jerry Zoldan, chief executive officer,
Morrisey Associates. "As the industry continues to change and we sought
a strategic partner to further our goals, HealthStream was a perfect
fit. We are both focused on providing exceptional credentialing and
privileging solutions and everyone at Morrisey Associates is excited by
the opportunities that this transaction brings to our customers and
employees."
For the year ended December 31, 2015, Morrisey Associates reported $12.8
million in revenues. Operating income for the same period was
approximately $4.4 million and the 2015 operating results included
approximately $180,000 in depreciation and amortization expense.
Terms of the Transaction: HealthStream, through its wholly-owned
subsidiary, Echo, Inc., acquired Morrisey Associates, Inc. for
approximately $48.0 million in cash.
Updated Financial Outlook for 2016: The Company is updating its
guidance for the full-year 2016 to reflect the projected financial
impact from the acquisition of Morrisey Associates. The Company expects
Morrisey Associates to add approximately $2.0 million to $2.5 million to
consolidated revenues for the remainder of 2016 after taking into
account the anticipated deferred revenue write-down noted below.
Consolidated HealthStream revenues are now expected to increase between
9 percent and 12 percent over full-year 2015.
Generally accepted accounting principles (GAAP) require companies to
write down beginning balances of acquired deferred revenue as part of
"fair value" accounting as defined by GAAP and the revenue, operating
income, and net income of the acquired Morrisey Associates business and
HealthStream in 2016 will be adversely impacted by this accounting
requirement.
The Company now expects that consolidated operating income will decrease
between 10 percent and 15 percent over full-year 2015 results, after
taking into account the anticipated deferred revenue write-down in
connection with this acquisition. In the third quarter, HealthStream
also has incurred approximately $1 million in transaction costs for
advisory services related to the Morrisey Associates transaction. In
addition to the deferred revenue write-down, which also impacts
operating income, and the transaction costs noted above, the Company
will incur transition and post-closing integration costs and
amortization of intangible assets recorded as part of the transaction.
All of these costs are also included in the estimates of the
year-over-year decrease in operating income.
Morrisey Associates' results will be reported as part of HealthStream's
Provider Solutions segment.
About HealthStream
HealthStream (NASDAQ: HSTM) is dedicated to improving patient outcomes
through the development of healthcare organizations' greatest asset:
their people. Our unified suite of solutions is contracted by,
collectively, over 4.5 million healthcare employees in the U.S. for
workforce development, training & learning management, talent
management, performance assessment, and managing simulation-based
education programs. Our research solutions provide valuable insight to
healthcare providers to meet HCAHPS requirements, improve the patient
experience, engage their workforce, and enhance physician alignment. Our
provider solutions offer healthcare providers innovative tools to
support healthcare organizations in appropriately credentialing and
privileging their workforce. Based in Nashville, Tennessee, HealthStream
has additional offices in Laurel, Maryland; Brentwood, Tennessee;
Pensacola, Florida; Jericho, New York; Boulder; Colorado; and San Diego,
California. For more information, visit http://www.healthstream.com
or call 800-933-9293.
This press release includes certain forward-looking statements
(statements other than solely with respect to historical fact),
including statements regarding expectations for the financial
performance of HealthStream and the acquired Morrisey Associates
business for 2016, and statements regarding the expected performance of
the acquired Morrisey Associates business and the potential benefits of
such acquisition to HealthStream, that involve risks and uncertainties
regarding HealthStream. These statements are based on management's
beliefs, as well as assumptions made by and data currently available to
management. This information has been, or in the future may be, included
in reliance on the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. The Company cautions that forward-looking
statements involve known and unknown risks, uncertainties, and other
factors that may cause the actual results, performance, or achievements
to be materially different from future results, performance, or
achievements expressed or implied by the forward-looking statements,
including, without limitation, as the result of risks referenced in the
Company's Annual Report on Form 10-K and in the Company's other filings
with the Securities and Exchange Commission. Consequently, such
forward-looking information should not be regarded as a representation
or warranty or statement by the Company that such projections will be
realized. Many of the factors that will determine the Company's future
results are beyond the ability of the Company to control or predict.
Readers should not place undue reliance on forward-looking statements,
which reflect management's views only as of the date hereof. The Company
undertakes no obligation to update or revise any such forward-looking
statements.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160808006018/en/
HealthStream, Inc.
Mollie Condra, Ph.D., 615-301-3237
Associate
Vice President, Investor Relations & Communications
Mollie.Condra@healthstream.com
Source: HealthStream, Inc.
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