The directors of Veradigm Inc. say they will look to cut costs and reorganize the health data and analytics venture after not finding a buyer in the past eight months.
Since announcing a formal review of strategic alternatives last May, the Veradigm board had talks with more than 30 entities studying some sort of transaction, the company said late Jan. 30. Five of those parties submitted indications of interest but those were not binding and didn’t result in a final proposal to buy Chicago-based Veradigm.
Up next: A deep dive, with the help of outside consultants, that will aim to “identify potential operational improvements and improve organizational alignment” as Veradigm seeks to get back on financial track. The company’s accountants also continue to work on restating its 2022 financial statements—flaws in its audit and financial controls led to revenues being overstated by about $20 million early this decade—and on filing results from recent quarters so that Nasdaq officials will consider relisting the company’s shares.
“Veradigm remains well-positioned to capitalize on the significant market opportunity ahead of us,” Interim CEO Tom Langan said in a statement. “Our leadership team has been working closely on developing the best path forward for our employees, our clients, and our stockholders.”
Under former interim boss Yin Ho, Veradigm last March bought large language model company ScienceIO to help it build out a lineup of products and services that can help providers, payers and life sciences companies manage data for both clinical and administrative purposes. In all, Veradigm has built up a set of more than 200 million clinical records.
Speaking in March at a conference hosted by investment bank Barclays, Ho said her team expected the company to produce about $108 million in adjusted EBITDA on revenues of about $627 million in 2024. From there, executives envisioned annual revenue growth of about 10 percent and growing profits as customers bought more higher-margin data intelligence services.
Shares of Veradigm (Ticker: MDRX), which have been trading over the counter as executives look to regain Nasdaq compliance, took a tumble on directors’ strategic update Jan. 31. They were changing hands around $5.55 in afternoon trading, down more than 30 percent from where they ended trading the day before. At that level, Veradigm is worth about $600 million—a little more than half its valuation of early 2024.
