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Filed by Eclipsys Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Shared Medical Systems Corporation
Commission File No. 001-13303
[ECLIPSYS CORPORATION LETTERHEAD]
Contact:
Kimberly Kriger or Mark Semer
Kekst and Company
(212) 521-4800
ECLIPSYS PROPOSES $2-BILLION MERGER WITH SMS
--TRANSACTION WOULD VALUE SMS AT $67 PER SHARE,
75% PREMIUM OVER CURRENT PRICE
-- COMBINATION WOULD BE ACCRETIVE TO SHAREHOLDERS OF BOTH COMPANIES
DELRAY BEACH, FL -- MARCH 2, 2000 -- Eclipsys Corporation (NASDAQ: ECLP), the
leading provider of end-to-end information solutions that enable healthcare
enterprises to balance and improve clinical, financial and satisfaction
outcomes, today announced that it has proposed a $2-billion merger with Shared
Medical Systems Corporation (NYSE: SMS), another leading provider of health
information systems and services.
The proposed merger would value SMS' common stock at $67 per share,
representing a 75% premium over SMS' March 2, 2000 closing price of $38.25, in
either a stock-for-stock or stock-and-cash-for-stock transaction. More
importantly, the merger would enable shareholders of both companies to benefit
from the significantly enhanced growth potential of the combined entity, which
would become the world's largest and most comprehensive provider of integrated
information solutions for the healthcare industry.
Eclipsys expects that the business combination would be accretive to
shareholders of both companies on an earnings-per-share basis. The combined
company would benefit from up to $2 billion worth of annual cross-selling
opportunities for the companies' products within the current combined customer
bases alone, as well as anticipated cost savings in excess of $100 million
achieved through the elimination of operational, service and product
redundancies.
AN INFORMATION REVOLUTION
Eclipsys has been seeking the merger of the two companies because "We
are just at the beginning of an information revolution in healthcare," stated
Harvey J. Wilson, Eclipsys chairman and CEO. "Just as the industrial revolution
fundamentally changed the way that goods and services were created and
supplied, the more widespread use of knowledge-based information solutions is
beginning to fundamentally change and improve the way in which healthcare is
delivered."
Merging these two leading solutions providers and their products and
services will dramatically accelerate that information revolution and escalate
the resultant benefits, Wilson said. "This will create an entity and a solution
that will give unparalleled support for the delivery of healthcare wherever and
however it is provided. Eclipsys' information solutions have already documented
impressive results, helping healthcare delivery organizations reengineer
processes to improve the quality and lower the cost of healthcare by enhancing
the workflow and actionable knowledge available to physicians and other
clinicians. In fact, the broader use of information solutions such as our
Sunrise Clinical Manager's Knowledge-Based Orders is one of the recommendations
in the Institute of Medicine's late November 1999 report on how to reduce
avoidable medical errors."
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ECLIPSYS CORPORATION
PROPOSED ECLIPSYS, SMS MERGER
MARCH 2, 2000
PAGE 2 OF 2
By integrating Eclipsys' solutions with SMS', including SMS' physician
practice-management and electronic data interchange (EDI) products, "We will
immediately emerge as the top company providing end-to-end solutions that
improve processes across the entire spectrum of healthcare delivery, including
the supply chain," Wilson said.
The merged company would also be the leader in the rapidly growing
e-health arena. "SMS has a recognized leadership position as an application
services provider (ASP), and Eclipsys has a significantly growing presence in
the field," he noted. "The merger will enable the combined company to continue
to expand its array of Internet-based information-management and integration
solutions, including Eclipsys' leading-edge eWebIT(TM) enterprise application
integration (EAI) solution. These Web-based solutions are increasingly being
sought by healthcare organizations (HCOs) seeking to free up capital dollars,
facility space, staff and other resources. And by combining the growing
Internet initiatives of the two companies with Eclipsys' HEALTHvision Internet
company affiliate, the new company would instantly be a major player in this
rapidly developing business segment."
MERGER DISCUSSIONS ATTEMPTED
For some time, Eclipsys officials have attempted to engage SMS in a
discussion of how and why the two companies should merge in order to create
greater value for shareholders and customers. "Unfortunately, we have been
unable to initiate a serious dialogue that might lead to the substantive
negotiations necessary to make this possible," Wilson said. "Given the dramatic
benefits we see from such a merger, and the rapidly changing marketplace in
which we operate, we believe that it is in both companies' best interest to
make our intentions public at this time."
The Eclipsys chairman/CEO noted that "Eclipsys has a proven track
record of delivering strong, consistent financial results for our shareholders.
Further, we have demonstrated an ability to expand our company through solid
organic growth -- powered by our sales pipeline -- as well as through the
successful integration of several strategic acquisitions. Over the last 4
years, we have consistently met or exceeded investor earnings expectations. In
1999, we grew our revenues and earnings per share by 37% and 75% respectively.
We believe the new company will be able to generate earnings growth in excess
of 40% annually over the next several years.
"We are confident in our ability to successfully execute this
transaction and capitalize upon the many opportunities that the proposed
combination of Eclipsys and SMS presents," Wilson concluded.
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ABOUT ECLIPSYS
Eclipsys Corporation (www.eclipsys.com) delivers end-to-end
information solutions that enable healthcare enterprises to achieve balanced
and improved clinical, financial and customer-satisfaction outcomes. Solutions
include its comprehensive, knowledge-based Sunrise software line; leading-edge
integration solutions; application services provider (ASP)
information-management solutions; business process reengineering; network
design and implementation; and full IT outsourcing. In conjunction with its
HEALTHvision affiliate (see www.healthvision.com), Eclipsys provides
customized, branded Web-based solutions to local healthcare delivery systems.
Eclipsys has more than 1,400 customer organizations throughout the U.S. and in
17 other countries. For more information, contact Investor Relations at
investor.relations@eclipsys.com.
Statements in this news release concerning future results, performance or
expectations are forward-looking statements. Because such statements involve
risks and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. These risks included
risks relating to the integration of the combined businesses and their
products, uncertainties regarding future financial results and other risks
described in the filings of Eclipsys with the Securities and Exchange
Commission. Eclipsys and The Outcomes Company are registered trademarks and
Sunrise is a trademark of Eclipsys Solutions Corp. Other product and company
names in this news release are trademarks or registered trademarks of their
respective companies.
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Investors are urged to read any relevant documents filed by Eclipsys with the
Securities and Exchange Commission because they will contain important
information. Investors will be able to obtain these documents, when available,
for free from the SEC's web site, www.sec.gov or from Eclipsys, Randy Thomas,
561-243-1441.