SAN FRANCISCO - Francisco Partners, a global investment firm, has announced the signing of a definitive agreement to acquire AdvancedMD, a provider of cloud-based medical office software, from Global Payments Inc. (NYSE: NYSE:GPN). The transaction is set to position AdvancedMD as a standalone business, aiming to accelerate its investment and expansion efforts.
AdvancedMD, established in 1999, offers a unified platform that integrates practice management, electronic health records, patient engagement, and payment solutions. The platform is designed to enhance practice operations, reduce administrative burdens, and improve patient outcomes. Post-acquisition, AdvancedMD will continue its operations under the leadership of its existing management team, with President Amanda Sharp (OTC:SHCAY) taking on the additional role of CEO.
Amanda Sharp commented on the acquisition, stating that it aligns with AdvancedMD's mission to empower healthcare professionals and will enable the company to expand its product portfolio and continue investing in the business and its team.
Francisco Partners, with a 25-year history and investments in over 450 technology companies, has significant experience in the healthcare technology market. The firm has previously executed similar carve-out transactions with other corporations, indicating a strategic approach to nurturing and growing technology businesses.
Justin Chen of Francisco Partners expressed enthusiasm for the acquisition, highlighting AdvancedMD’s integrated platform and its positioning to ensure customer success. Ezra Perlman, Co-President at Francisco Partners, acknowledged the company's growth and innovation and expressed confidence in the acquisition's potential to build upon its foundation of success.
Global Payments will maintain a relationship with AdvancedMD, continuing to manage the company's payment acceptance capabilities as a long-term partner. This approach is expected to ensure a smooth transition for employees and clients.
The acquisition is anticipated to close in the fourth quarter of 2024, subject to customary closing conditions. Financial advisement for the transaction is being provided by Moelis (NYSE:MC) & Company LLC and Kirkland & Ellis LLP for Francisco Partners, and by Bank of America and Wachtell, Lipton, Rosen & Katz for Global Payments.
This news is based on a press release statement from Francisco Partners.
In other recent news, Global Payments Inc. reported third-quarter results, posting adjusted earnings per share of $3.08 and revenue of $2.6 billion, a 5% YoY increase. The results met earnings estimates and exceeded revenue expectations. Adjusted net revenue rose 6% to $2.36 billion, and the company's adjusted operating margin expanded by 40 basis points to 46.1%.
Global Payments also reaffirmed its full-year 2024 outlook, projecting adjusted net revenue between $9.17 billion and $9.30 billion, and adjusted EPS in the range of $11.54 to $11.70. In other developments, the company announced a definitive agreement to sell its AdvancedMD business to Francisco Partners.
The company also initiated a $600 million accelerated share repurchase plan and increased its share repurchase authorization to $2.5 billion. Lastly, a dividend of $0.25 per share was approved by the company's board. These are among the latest developments for Global Payments Inc.
InvestingPro Insights
As Global Payments Inc. (NYSE: GPN) prepares to divest AdvancedMD, it's worth examining the company's financial health and market position. According to InvestingPro data, Global Payments boasts a market capitalization of $25.2 billion, reflecting its significant presence in the financial technology sector.
The company's P/E ratio of 18.17 suggests a reasonable valuation relative to its earnings. This is further supported by an InvestingPro Tip indicating that Global Payments is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of just 0.22 for the last twelve months as of Q2 2024. This could signal an attractive entry point for investors following the AdvancedMD divestiture.
Despite the upcoming sale, Global Payments has demonstrated solid financial performance. The company's revenue for the last twelve months as of Q2 2024 stood at $9.9 billion, with a healthy revenue growth of 6.63% over the same period. Moreover, the company's profitability remains strong, with a gross profit margin of 62.84% and an operating income margin of 24.29%.
An additional InvestingPro Tip highlights that Global Payments has maintained dividend payments for 24 consecutive years, underscoring its commitment to shareholder returns. This track record of consistent dividends may provide some reassurance to investors during the transition period following the AdvancedMD sale.
For those interested in a deeper analysis, InvestingPro offers 6 additional tips for Global Payments, providing a more comprehensive view of the company's prospects and potential risks.
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