Allscripts names CFO as reports of impending sale swirl
Electronic health record systems vendor Allscripts, which is said to be shopping for a buyer, announced Monday that Richard J. Poulton will sign on as chief financial officer, effective Oct. 29.
One of the reasons financial analysts downgraded Allscripts stock from “buy” to “neutral” at the end April, was the lack of a CFO. It was also then that Allscripts fired Board Chairman Phil Pead, which triggered three board members to resign in protest,
Allscripts' CFO had resigned to take another position outside of healthcare, a move that was reportedly unrelated to the turmoil within the company at the time. But the departure of a CFO by itself would have been enough to triggger a downgrade, analysts said at the time.
It does not appear that the hiring of Poulton for the CFO position will stem the tide of discussion pointing toward a sale of the company.
Last week Bloomberg reported that private equity firms Blackstone Group, Carlyle Goup and Silver Lake Management had each submitted a first round of bids.
“The move to electronic health records under Obamacare makes Allscripts a valuable property," wrote Paul Ausick Oct. 8 in The 24/7 Wall St. Street Morning Newsletter. “Just guessing here, but a buyout at $15 looks too cheap. And this company almost certainly will go to the highest bidder.”
Allscripts shares were trading at $13.82 this morning,
According to an Allscripts filing with the Securities and Exchange Commission Oct. 15, Poulton will receive an annual salary of $450,000. He will receive a one-time cash payment of $750,000 in June 2013 and will receive a new-hire equity grant of restricted stock units with a grant-date value of $1,000,000 and a 2012 long-term incentive equity grant of restricted stock units with a grant-date value of $1,000,000.
Also, according to the filing with SEC, if Poulton were to be terminated in connection with a change in control of the cmpany, the severance payment would be two-times his salary and target bonus and full vesting of equity awards is provided.
Analysts trace the turmoil Allscripts is experiencing today to a 2010 merger with Eclipsys gone bad – a failure to execute on both product integration and culture integration.
The news release Allscripts issued Oct. 15 regarding Poulton’s hiring takes a business-as usual approach.
Poulton will oversee all company finance functions including controllership, tax, financial planning and analysis, treasury and investor relations, according the Allscripts release. He will report to Allscripts CEO Glen Tullman.
"Rick is an accomplished and respected executive who brings a strong operational focus to Allscripts," said Tullman. "His prior experience as a public company CFO, paired with a strong record of delivering results paired with his strategic approach to financial management make him the right choice for Allscripts as we execute on our growth plans.”
As for Poulton, his statement includes a nod to innovation and transforming healthcare.
"Allscripts has a broad product portfolio, a strong client base, and a team committed to making a difference in healthcare," said Poulton. "I believe there are significant opportunities for Allscripts to lead through innovation while enhancing product focus and client experience. I am looking forward to the opportunity to work with Glen and the rest of the team as we help to transform healthcare with our clients and garner the financial advantages of doing so for our employees and our stockholders."
Poulton succeeds interim CFO David Morgan and will be located at Allscripts corporate headquarters in Chicago.
Poulton brings more than 18 years of experience in financial planning, operational and business management, Allscripts officials note. He joins Allscripts from AAR Corporation (NYSE: AIR), a provider of diverse products and services to the worldwide commercial aviation and government/defense industries, where he served as CFO and treasurer. Prior to AAR, Poulton spent more than 10 years at UAL Corporation in a variety of financial and business development roles including as senior vice president of business development as well as president and CFO of the company's client focused Loyalty Services subsidiary.