Allscripts (MDRX) Announces $200 Million Convertible Senior Notes Offering

Allscripts Healthcare Solutions, Inc. (Nasdaq: MDRX) (“Allscripts”) today announced the commencement of a private offering of $200 million aggregate principal amount of its convertible senior notes due 2027 (the “notes”), subject to market and other conditions. Allscripts also expects to grant the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $30 million aggregate principal amount of the notes. The notes will be offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).

The notes will be senior, unsecured obligations of Allscripts, and interest on the notes will be payable semiannually in arrears. The notes will be convertible at the option of the holders only in certain circumstances and during certain periods. Conversions of the notes may be settled in cash, shares of Allscripts’ common stock, or a combination of cash and shares of Allscripts’ common stock, at Allscripts’ election. Allscripts will not have the right to redeem the notes prior to maturity. The notes are expected to mature on January 1, 2027, unless earlier repurchased or converted in accordance with their terms prior to such date. The interest rate, conversion rate and certain other terms of the notes will be determined by negotiations between Allscripts and the initial purchasers.

Allscripts expects to use a portion of the net proceeds from the offering to pay the cost of capped call transactions described below, and Allscripts expects to use the remaining net proceeds to repay outstanding borrowings under its senior secured revolving credit facility.

In connection with the pricing of the notes, Allscripts intends to enter into one or more privately negotiated capped call transactions with certain of the initial purchasers and/or their respective affiliates (the “option counterparties”). The capped call transactions are expected generally to reduce the potential dilution to Allscripts’ common stock upon any conversion of notes and/or offset any cash payments Allscripts is required to make in excess of the principal amount of the converted notes, as the case may be, in the event that the market price of Allscripts’ common stock is greater than the strike price of the capped call transactions (which will initially correspond to the initial conversion price of the notes and is subject to certain adjustments under the terms of the capped call transactions), with such reduction and/or offset subject to a cap based on the cap price of the capped call transactions. If the initial purchasers exercise their option to purchase additional notes, Allscripts intends to enter into one or more additional capped call transactions with the option counterparties.

Allscripts expects that in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to Allscripts’ common stock and/or purchase shares of Allscripts’ common stock concurrently with, or shortly after, the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Allscripts’ common stock or the notes at that time. In addition, Allscripts expects that the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to Allscripts’ common stock and/or purchasing or selling shares of Allscripts’ common stock or other securities of Allscripts in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during any observation period relating to a conversion of the notes). This activity could also cause or avoid an increase or a decrease in the market price of Allscripts’ common stock or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, could affect the number of shares and the value of the consideration that noteholders will receive upon conversion of the notes.

Pursuant to Allscripts’ publicly announced stock repurchase program, Allscripts opportunistically purchases shares of its common stock and may, in compliance with the provisions of Rule 10b-18 under the Securities Exchange Act of 1934, as amended, purchase shares of Allscripts’ common stock pursuant to open market transactions prior to the pricing of this offering. This activity could increase (or reduce the size of any decrease in) the market price of Allscripts’ common stock at that time and/or the conversion price of the notes.

Neither the notes nor the shares of Allscripts’ common stock issuable upon conversion of the notes, if any, nor the capped call transactions have been, nor will be, registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

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