BCE Emergis aims to boost its drug and dental claims processing business by making a $4.95-million offer Tuesday for WARE Solutions of Calgary.
Montreal-based
BCE Emergis targeted WARE for its modern slate of health-care applications that will accelerate Emergis’ focus on the health-services market, said Daniel Baron, president of BCE Emergis eHealth Solutions (Canada).
“”All of our solutions are Web-based, Java-based, make use of the Internet as a transport mechanism, (and are) low-cost,”” explained John David, president and CEO of WARE. “”We also add new markets to where Emergis may not have had a strong presence — that being with government or with the physician desktop.””
The acquisition also gives Emergis a physical presence in Western Canada, where WARE’s head office and employees will remain, said Baron.
The two firms’ joint drug and dental claims’ products will be delivered to customers over the next six months to a year, said Baron, adding that some applications are 25 per cent to 50 per cent complete.
Emergis’ offer also solves problems for WARE. In the past, the Calgary shop was too small to act on some aspects of its business plan, said David. But that’s changed. “”We have a large company, with a large sales force, and financial backing to make this thing go.””
Moreover, WARE is better positioned to capitalize on a growing phenomenon in which governments and insurers pour more cash into health-related technology solutions. “”With Emergis behind us, I would think that our customers are going to feel much more secure that this company is going to be around and the technology is going to continue to evolve,”” said David.
Yet meshing the two businesses will also present challenges, such as striving to keep “”the entrepreneurial culture that Ware brings to the table,”” said Baron. Although WARE’s stable of 17 employees (which will grow over the next three months to six months) will become part of the 2,100-strong Emergis, Baron prefers to describe the relationship as a “”coordination of efforts”” than an integration.
While the deal is considered to be minor as acquisitions go, analysts believe Emergis’ decision to dip its foot deeper into the health-sector pool will help it to grow more robustly. Mark Quigley, research director of The Yankee Group in Ottawa, anticipates greater revenue opportunities for Emergis as an increasing number of drug claims are processed outside of provincial health-care schemes, courtesy of an aging population and diagnostic medicines enabling early detection of illnesses.
But Quigley cautions that Emergis will have to be “”brutally efficient”” if it wants to maintain its margins as it provides these health-care services. “”You should be able to go in and demonstrate . . . bottom-line savings and bottom-line growth at the end of the day for the insurers.””
The agreement between Emergis and WARE, expected to close next January, is growing evidence of increasing investor confidence in the technology market that began to emerge with spiked acquisition activity during the summer, said David Shore, an analyst covering BCE at Desjardins Securities in Toronto. He points to Oracle Corp.’s bid for PeopleSoft, ongoing battles for Pivotal Corp., and Open Text Corp.’s purchases of Germany’s IXOS Software and acquisition of 75 per cent interest in Gauss Inc.
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