Misys to buy Sunquest

June 25, 2001 Posted: 0752 GMT

LONDON (CNN) -- British software company Misys agreed on Monday to buy Sunquest Information Systems of the U.S. for $404 million in cash.

The acquisition of Sunquest (SUNN: Research, Estimates), which provides clinical systems for hospitals in the U.S., will further increase Misys' position in the health-care information technology sector.

Misys will offer to buy all of Sunquest's shares for $24 each, representing a 63 percent premium to Sunquest's closing price of $14.74 in New York trade on Friday.

Around 76 percent of Sunquest's shareholders are committed to the deal, the company said.

"The acquisition of Sunquest consolidates Misys' position as a leading provider of health-care information systems, extending Misys' presence into the acute care market, (and) making it well placed to exploit the expected growth in clinical systems," Misys Chairman Kevin Lomaz said.

U.S. health-care expenditure is recovering strongly following a decline in 2000, the company said. Health-care providers are increasing investments in a bid to improve efficiency and standards after a period of under-investment.

Growth in software expenditure is expected to increase 13 percent a year to 2006, according to research group Dataquest.

Misys said it expects the acquisition to boost earnings, before goodwill amortisaion and any exceptional costs, in the year ending May 31, 2002.

Shares in Misys (MSY) were unchanged at 485 pence in early London trading.

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