Another One Bites the Dust...

PACSman: The headlines blared out today what NostraPACSMan predicted almost a year ago – Health Systems Solutions Enters into Agreement to Acquire Emageon to Create Healthcare Technology Leader. OK so I didn’t predict the actual company who was buying them – I have enough challenges with the government agencies already without the Securities and Exchange Commission (SEC) coming down on me for divulging insider information I had no knowledge of – I swear!! But anyone in their right mind had to have seen this one coming (and no comments about whether I am in my right mind or not either please).

I can imagine the folks over at Oliver Press Partners, who own almost 17 percent of Emageon stock, aren’t too thrilled with getting back about 35 percent of what they paid for their “investment” in Emageon…but it beats losing it all too which was the direction the company was going even though they have a decent product and excellent marketing.

I find it sad in a comical way (or comical in a sad way) that the company didn’t even bring in enough revenue to cover the value of their Initial Public Offering (IPO) let alone any residual value. I’m not sure if that is a sign of the economic times or sign that the company was hurting in a big way. Word on the street has it that Dynamic Imaging’s sale to GE was nearly double that of Emageon’s sale value...and many other PACS sales have been significantly higher as well. Of course, times were different then too, and the companies different as well. The Rolling Stones said it right though – “You can’t always get what you want...but you get what you need…” and this is what Emageon needed… I guess. For my taste this deal was much too close to dating on Match.com or e-Hominy Grits – and frankly, if that’s the best deal I can find that’s out there, I’ll do without (and have).

Financing $85M to purchase the company for $62M is a smart move on HSS’s part, but HSS needs to inject some serious new blood at Emageon to make them start movin’ and groovin’ because at their current burn rate they will be out of money in about a year...or less… Of course, by then, management will no doubt have cashed in whatever stock they haven’t already (after the mandatory waiting period of course)…and then add to that any golden parachutes and such. So if they actually succeed, it’s an added bonus, and if not…well, I got mine so. Again, reminds me too much of dating (and me NOT getting mine thank you very much). It’s visions of Merge all over again…I just sincerely hope that none of the many guys and gals I know in the company get hurt like so many others have when companies were bought and sold or are laid off in the struggle for a company just to try and stay alive another day…

Whether the market reacts favorably to this sale and to the new buyer is anyone’s guess. I have never heard of HSS, and while they claim that their “portfolio of products and services extends across many segments of healthcare including home healthcare, medical staffing, acute and post-acute facilities, and telehealth/telemedicine, grouped into three segments: technology solutions, software and consulting,” their web site reflects something totally different. Time will tell though – and ya gotta give them a chance…Even the PACSman gives out chances…once…and only once….cuz as our fearless leader George W. Bush once said “…fool me once, shame on — shame on you. Fool me — you can't get fooled again.”

Ms. PACS: At least our God fearing leader had an appreciation for The Who.

And ‘fear’ – of the evil empire, that is – was the crux of his re-election campaign – sans special effects. It also is the resounding theme today on Wall Street, across all world markets, in bottomed out stock indices – the Dow, FTSE, Nikkei – as well among consumers and homeowners.

It sounds like you, PACSman, see something fearful about this transaction. Fear that CEO’s go unchecked and rape and pillage companies, while all the workers get are sweat and tears. True, the company owners did whatever it took to go public, and once they did and growth teetered, the stockholders were ready to cash in as fast as they could. It’s not about the heart and soul of the people who build it, but about how big a buyout you can get. It is about fear - or better yet, about not fearing because whoever is willing to assume the risk, will likely reap the most rewards.

As for rape and pillage, if it’s consensual, then no one’s at fault, unless there’s a minor involved. The workers get to work in a company that’s growing, hopefully gives them raises and if they are smart, they will get a deal on their company’s stock – I know I did with my last company and now I get a check for 6 dollars and fifty-six cents – every month!

True, life isn’t fair, or is it? Although the golden parachutes that the greedy CEO’s get are outrageous, we have to recognize that was part of the recruitment process. Also, who’s fooling whom? The CEO pay off becomes part of the next overpriced deal. That’s why they need $85 Million, not just $62. Look, when you buy a house – that’s just breaking ground in a very large money pit. But maybe in 10 years you’ll build some equity. As for those money grubbing CEOs – they are no geniuses – they just know how to play the game. The real fear in this scenario was that there would be no buyers for Emageon. But they managed to sell the farm. As for the employees, don’t you think they had some insight into the company’s plans even before NostraPACSMan did? Hopefully, most got out while they could.

No, “my friends” (said in a Senator’s eerie geriatric voice), the real fear is what will happen in November. To that, even Bush might mutter: “Meet the new boss...same as the old boss.”