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May 19, 2008

EnovateIT supplies custom computer wall stations, point-of-care carts, and articulating arms. Our mission is to create better patient care. We bring patients and caregivers closer by designing and facilitating effective solutions. Our integrated healthcare mobility solutions merge innovation, experience and technology to solve healthcare information needs from a single source. EnovateIT.

1. Vivalog Vegas: McKesson Rolls Dice on Radiology Case-Sharing Site

Facts and Background

McKesson announced Wednesday that it had acquired Vivalog LLC, a Seattle-based medical imaging reference and case-sharing site. Terms were not disclosed.

Opinion

Like most acquisitions, this one's interesting at the right price. Vivalog claims 14,000 registered users from 4,000 hospitals worldwide.

Musings

Vivalog was founded with an NIH grant. Will we taxpayers get a cut from the proceeds?
McKesson probably has more of an interest in Vivalog as an eyeball-generator for prospecting. The technology might be useful for McKesson products, but the immediate value is in promotion.
It's been called the "YouTube of radiology imaging." On the other hand, Google hasn't figured out how to make money from YouTube, either.

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2. Emageon the Possibilities of a Hostile Board Takeover

Facts and Background

Oliver Press Partners, an investment fund manager which owns nearly 17% of Emageon, has filed SEC paperwork indicating that it will seek to elect its own slate of nominees to Emageon's board at the June 23 shareholder meeting. It is soliciting EMAG shareholders to sign over their proxy rights.

Opinion

This is a tactic with only one goal: push the sale or breakup of Emageon to boost short-term share price for its large investor.

Musings

In its April earnings report, Emageon claimed to have exhaused all possibilities for strategic alternatives.
Revenue was down 30% in the most recent quarter, with the company blaming long sales cycles, increasing market saturation, and a tighter capital market.
OPP tried the same tactic with Phoenix Companies in January. That company added additional board positions and gave one to an OPP nominee. It also paid OPP $3 million.
In fact, a 1990 article in the New York Times named Augustus K. Oliver as being part of another firm (Gollust, Tierney, & Oliver, nicknamed the "Ivy League Buccaneers") that was a master of "strategic block investing," quietly buying shares of undervalued companies, then threatening a proxy fight to bully management into taking some action simply to boost the share price so they could sell quickly for a profit.

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3. Talyst Raises Money, Lowers Headcount and Expectations

Facts and Background

Pharmacy automation vendor Talyst of Bellevue, WA announced Wednesday that it had raised $20 million in its third round of financing. The company's CEO had resigned the previous week. Talyst, which laid off 17 employees earlier this year, cut 11 more positions of its 154 this week.

Opinion

The company's losing money, so investors with millions at stake from current and previous investment rounds are helping make operational decisions (like replacing the CEO, most likely).

Musings

It has to be tough to compete with McKesson, Omnicell, and Cardinal Health, especially when even those companies seem to be facing tougher conditions.
Talyst brought in new leaders last summer whose background was selling out companies, leading to predictions that the company would be sold.
The deposed CEO predicted in 2006 that the company would be profitable in 2007 at $80 million in sales. He was wrong and now he's gone.
Talyst had an exlcusive distribution deal with Cardinal Health, but it expired earlier this year.
Four of the company's seven board positions are held by investment company representatives.

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