Computer Programs & Systems (CPSI) Acquires Viewgol

CPSI (NASDAQ: CPSI), a community healthcare solutions company, today announced it has closed its acquisition of Viewgol, a provider of ambulatory revenue cycle management (“RCM”) analytics and complementary outsourcing services.

“Our acquisition of Viewgol rapidly accelerates our offshoring initiatives with more than 80% of its workforce based offshore today,” said Chris Fowler, chief executive officer of CPSI. “The scalability of this direct offshore presence marks a critical step towards our priority: ensuring our RCM offerings remain affordable, profitable, and scalable by leveraging the global marketplace. Today, Viewgol provides RCM services and analytics software solutions to 38 customers in 15 states, representing over 20 different specialty practices. Further, Viewgol’s operations are almost entirely focused on the ambulatory setting, creating additional market expansion opportunities and diversifying our RCM business. Together with Viewgol, we will not only be able to achieve greater efficiencies and drive margin at scale, but we also expect to capture meaningful synergies by utilizing its existing offshore infrastructure.”

“This combination makes a lot of sense on many fronts,” said Doug Huffman, chief executive officer and co-founder of Viewgol. “Most exciting is the value we can deliver to Viewgol clients and our employees as part of a larger organization with expanded resources, tools, and RCM solutions.”

Exclusive of synergies resulting from the transaction and incremental amortization expense related to the acquired intangible assets, Viewgol is expected to generate GAAP net income of approximately $1.5 million and Adjusted EBITDA of approximately $4.5 million in 2024.

The exact timing of synergy realization is difficult to predict, and the incremental amortization expense related to the acquired intangible assets is dependent upon completion of a business valuation for purposes of allocating the purchase price; as such, the Company is unable to estimate the full impact of the transaction on CPSI’s expected 2024 GAAP results at this time. CPSI intends to provide an update to full-year 2023 guidance for the combined company on its third quarter earnings call.

Transaction Summary

Under the terms of the agreement, the purchase price is $36 million in cash, with an additional earnout of up to approximately $31.5 million based on a combination of achieving certain profitability metrics for 2024 and the creation of additional offshore resources supporting TruBridge. McDermott, Will, & Emery, Grant Thornton, and Willis Towers Watson acted as advisors for CPSI. Brentwood Capital Advisors, Morris, Manning, & Martin, and Meredith CPAs acted as advisors to Viewgol.

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