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HealthPort Readies for Sale: Exclusive

Stocks in this article: EPOC MEDH QSII CPSI

NEW YORK ( TheStreet) -- Privately held healthcare IT company HealthPort has hired investment bank Credit Suisse and is looking for potential suitors, according to a source close to the company.

A process for the Alpharetta, Ga.-based company, which has been owned for the last several years by private equity firm Abry Partners, kicks off on Monday.

HealthPort generated upwards of $60 million in EBITDA last year and is likely targeting financial sponsors with its process, the source added.

The company originally filed for an IPO in 2009, but scrapped plans due to market conditions.

Privately-backed healthcare IT companies typically pursue a dual track when original investors are seeking an exit. However, recent IPOs and general capital markets conditions suggest that right now may be an easier time for a sale than a public offering.

Three of the most recent IPOs in the space are Epocrates (EPOC), Accretive Health (AH) and MedQuist (MEDH). Shares of Epocrates and Accretive Health are off by over 50% since debuting. MedQuist, meanwhile, has managed a 12% return since its IPO, though it priced below its intended offer price and sold 43% fewer shares than expected.

Another problem for healthcare IT companies may be recent commentary from one of the existing public companies in the space, Computer Programs and Systems (CPSI). The company upended the bullish narrative for health IT stocks, commenting in October earnings that new growth of business hasn't been as rapid as the market had hoped. Shares of Computer Progarms and Systems have declined 27% since then.

When the federal government passed the electronic health records stimulus, grand projections were made about how large, and how quickly, electronic records would be adopted by physicians' groups and hospitals. But forecasts haven't accelerated as quickly as hoped, punishing healthcare IT firms.

HealthPort could not be reached for comment.

Credit Suisse declined comment.

--Written by Olivia Oran and Eric Rosenbaum in New York.

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