With a name like Quovadx
Quovadx is three businesses in one. Its integration solutions division provides software to help different health-care information technology systems talk to each other. The CareScience division collects data to improve patient safety. Lastly, Rogue Wave Software offers a collection of programming tools to build business applications.
To close the buyout deal, Quovadx sold CareScience to competitor Premier for $34.9 million. Battery Ventures bought the remaining businesses for $136.7 million. On a conference call, Quovadx CEO Harvey Wagner said that the buyout process began in August, involving many potential buyers.
But at 1.1 times revenues, the ultimate buyout valuation seems low, compared to recent health-care software buyouts. Netsmart Technologies
While the purchase looks like a raw deal for Quovadx shareholders, the low price isn't entirely unjustified. The company grew revenue by only 1% to $84.1 million over the past year, and it posted negative EBITDA of $3.6 million in the same period. Management was badly distracted by the settlement of shareholder lawsuits.
Quovadx is also struggling to gain traction in the health-care industry amid grueling sales cycles and fierce competition. It's an increasingly tough environment for small-cap players like Mediware Information Systems
Further Foolishness, heal thyself: