The dbMotion medical computing company will be sold to US company AllScript, the two companies announced today (5.1.13). The sale will be made for $ 235 million, of which $ 145 million will be in cash, $ 50 million will be in the shares of Allscript and another $ 40 million will be paid in cash for a deferred payment for 18 months.
Founded in 2003, dbMotion is one of the pioneers in the field of computer systems for the medical field. Its sales reach tens of millions of dollars and it has 110 employees in Raanana, Hod Hasharon and Omer.
dbMotion was One of most the promising start-ups of “Globes”.
The company’s major customers today are hospitals and medical networks, which use the company’s technology to consolidate various types of information stored in different databases of the same medical entity. In hospitals in the United States, where the company’s main market is located, it is sometimes one of the hundreds of departments that use different databases that are adapted to their needs.In the future, the system is expected to participate in the expected revolution of the consolidation of medical information of all the medical entities for which a single patient is being treated. Such a solution is technologically possible through the dbMotion system, but is delayed for political, marketing and bureaucratic reasons as well as safety concerns.
dbMotion has developed a system that enables the retrieval of a virtual “medical file” for a patient, integrating information from a large number of databases in which data is maintained by various departments in hospitals and clinics where the patient is being treated. The retrieval is done from all databases, within a few seconds. When the transaction is finished, the file is closed and disappears and each data is stored only in the relevant database.
Yuval Ofek, CEO of the company, explains: “We are not a medical record company, but we are integrating information along the spectrum of treatments between hospitals, clinics and various experts. The need to share and consolidate the information so that it will be possible to obtain a comprehensive picture is important for the patient and also enables streamlining of the system, and in this we are among the leaders in the world. “
The main beneficiaries of the deal are Israeli venture capital funds Pitango, Gemini and Vortex. This is a 4-fold return on investment when it can be estimated that all investors benefit from it at similar rates, because everyone has invested in the company since its inception. Together with an investment by the University Hospital of Pittsburgh and with an investment by Allscript itself in 2011, more than $ 50 million has been invested in dbmotion up to date.
The entrepreneurs and the senior management are also expected to benefit from the exit, and they will probably pocket tens of millions of dollars.
Allscript, the purchasing company, specializes in medical information, including clinical management services, electronic billing, electronic prescriptions and medical records. It is traded on Nasdaq at a value of $ 2.15 billion.
“Pioneers in the Field”
Rami Beracha, a partner in Pitango, who led the investment on behalf of the company, said: “dbmotion was established within the IT company Ness by the developers Assaf Halevy and Ziv Ofek, who implemented the Ness platform for medical purposes and were the pioneers in the field.
“The initial development was carried out by the company, together with Clalit Health Services, which was also a pioneer and unique in the field, as a body that is also an insurance company and also a treatment system that includes community medicine as well as hospitals.” Ofek explained that “Clalit Health Services was ahead of the market and invested in the very first stages, and thanks to our experience with Clalit, when the global market began to gain momentum, we were already ready with our systems.”
Beracha: “Yuval, the company’s CEO today, is the brother of Ziv Ofek, one of the two entrepreneurs. Yuval was a partner in Pitango and he introduced us to the company and offered us to invest in it as a spin of Ness. When we realized that he wanted to be the CEO, Yuval liked the idea, and since then he has built a company. “
Together with Pitango, Gemini and Vertex also entered the company. “They invested when she was not yet a company,” Beracha says. In 2006 he joined the UPMC Hospital in Pittsburgh, which entered as a strategic investor and customer. “They are very important opinion leaders,” says Beracha. “In the United States, they really raised the company. The offices moved to Pittsburgh and then the company began its break in the US, and over the years it has built itself a technological leader. “
In this period, the medical computing market has become hot, both because of the understanding of health systems that they will no longer be able to ignore the computer and Internet revolution and continue to manage patients’ information in paper files, thanks to incentives given by the Obama administration in recent years to encourage this process, Out of the United States’ burdensome health budget.
The incentives pushed the market first but later became a double-edged sword. “Some of the incentives have been accepted and some have not.” In the past year, many factors have sought to wait and see where this legislation is converging, and therefore there has been a certain slowdown in the market, which is just beginning to be released. “
However, if you look at a range of about five years, the market is on the rise. Over time, many medical professionals have entered the field – not only medical computing companies such as Maxen, but general IT companies such as IBM as well as major medical insurance companies that have acquired IT activities so that they can track their customers(with their permission of course).
n recent years consolidation has taken place in the field and dbmotion has been one of the last independent companies and has received several requests and offers for its acquisition in recent years. Beracha explains that: “The founders were waiting for a proposal that would be attractive economically, but would also enable a real merger that would preserve the capabilities of the company, the product and the employees.”
– The situation of the company today is its peak, or have been ups and downs in recent years?
“No, the company is at its peak in every respect: sales, strategic agreements, team management.”
Ofek: “To date, we have focused on realizing our value, and as we grow and the need for customers grows, we have to reach a deeper and faster market, and we succeeded in doing so with partnerships.