Computer Programs & Systems (CPSI) Announces Healthland Holding Inc Acquisition; FBR Capital Raises Price target to $53

FBR Capital reiterated a Market Perform rating on Computer Programs and Systems (NASDAQ: CPSI), and raised the price target to $53.00 (from $45.00), following the company's announced acquisition of Healthland Holding Inc. and its affiliates for $250 million in cash and stock. Management expects the transaction to be more than 35% accretive to adjusted EPS in 2016 and more than 50% accretive in 2017.

Analyst Steven Halper commented, "On Wednesday, November 25, CPSI announced that it will acquire privately held Healthland Holding Inc. and its affiliates for $250 million in cash and stock. Healthland is a provider of integrated technology solutions to rural community and critical access hospitals. This acquisition should strengthen CPSI's position in the small hospital market, but it remains to be seen what the growth outlook will be for the combined community. Furthermore, the company announced some significant changes in its management team. The acquisition was surprising given that CPSI has never done an acquisition. We view this acquisition as a step toward the right direction and are encouraged by management's proactive efforts."

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Shares of Computer Programs and Systems closed at $50.06 yesterday.

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