After reporting solid third quarter results on May 20, 2010, Intuit Inc. (INTU) announced the acquisition of privately held Medfusion for $91.0 million in cash.
With the acquisition, Intuit will now be able to provide easy-to-use communications tools to doctors and those patients that need to make a connection regarding clinical, administrative and financial matters.
Medfusion offers online solutions that facilitate the provision of healthcare services to patients, at the same time enabling healthcare providers to improve office efficiency and revenue generation.
Intuit plans to leverage Medfusion’s electronic software to give patients the opportunity to communicate online with doctors. With Medfusion technology, health care consumers will be able to communicate with clinics and other healthcare providers to schedule appointments, pay bills, request prescription refills, fill in medical forms and review their lab results.
Management expects the acquisition to not only strengthen Intuit’s position in the healthcare industry, but also expand its Software-as-a-service (SaaS) offerings with a solution currently used by more than 30,000 healthcare providers, most of whom are small businesses.
According to management, the acquisition will likely reduce fiscal 2010 earnings by approximately one cent, but will not materially affect earnings in the following year.
California-based Intuit is a leading provider of business and financial management solutions. Its flagship products and services include QuickBooks, Quicken and TurboTax.
Intuit reported strong third quarter revenue driven by strong customer demand for tax filing on the web. For fiscal year 2010, Intuit expects revenue to grow around 10.0% implying a revenue guidance of $3.41 billion - $3.43 billion.
Management also guided to GAAP EPS of between $1.69 and $1.72, and non-GAAP EPS of between $2.03 and $2.06, which are now expected to be negatively, though minimally, impacted by the acquisition.
We maintain our Neutral rating on Intuit.