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Omnicell (OMCL) New Buyout Expands Patient Engagement Suite

With the FDS Amplicare acquisition, Omnicell (OMCL) is expected to gain from several healthcare trends, banking on its offerings of digital technologi...

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Omnicell OMCL recently completed the acquisition of pharmacy software solutions provider, FDS Amplicare. This $177 million deal, which was initiated back in July, is aimed at expanding Omnicell’s Advanced Services portfolio.

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The acquisition particularly adds a comprehensive and differentiated suite of SaaS financial management, analytics, and population health solutions to Omnicell’s EnlivenHealth division. According to Omnicell, this acquisition will enable new clinical services and expand growth and profitability opportunities.

The Acquisition and Strategic Synergies

Omnicell’s EnlivenHealth provides patient engagement solutions for retail pharmacies and health plans. It targets to provide advanced digital solutions to measurably improve patient health outcomes and also drive growth and profitability.

The ongoing pandemic situation has accelerated some major healthcare trends like digitizing care delivery including telehealth and shifting the point of care to a broader range of settings, including innovative hospital-at-home programs and local pharmacies.

According to Omnicell, in such a situation, the FDS Amplicare acquisition is expected to enable it and its EnlivenHealth division to gain from the industry-wide trends, banking on comprehensive offerings of digital technologies, SaaS solutions, and tech-enabled services.

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The acquisition of FDS Amplicare’s differentiated financial management, analytics, and population health solutions, along with its nationwide network of more than 15,000 independent retail pharmacies has broadened EnlivenHealth’s industry footprint.

Further, Omnicell noted that at present Direct & Indirect Remuneration (DIR) fees continue to challenge the business health of the retail pharmacy industry, especially independent pharmacies. FDS Amplicare’s offerings are playing a crucial role in helping retail pharmacies manage, forecast, and mitigate their DIR fee exposure. Omnicell claims that when combined with EnlivenHealth’s clinical and data science capabilities, this differentiated, multi-pronged offering will enable retail pharmacies to bend the DIR growth curve.

Favorable Industry Trend

Going by an imarc report, the global patient engagement solutions market exhibited strong growth during 2015-2020. The market is expected to witness a CAGR of around 13% during 2021-2026. Looking at this market’s huge growth potential, we believe the latest acquisition of FDS Amplicare to be well-timed.

Notable Developments

On Sep 7, 2021, Omnicell announced the opening of a new software development center through its subsidiary based in Bangalore, India. The company’s new center will focus on product innovation to advance its strategy to deliver the cloud-based infrastructure in order to support the Autonomous Pharmacy. This new center is likely to expand the company’s cloud-based solutions portfolio.

In August 2021, Omnicell announced the latest enhancements to its industry-leading portfolio of medication management solutions. These new capabilities, included in the company’s Summer 2021 Release, focus on superior customer experience and innovation to drive maximum value sooner; and deliver improved workflow efficiency, expanded automation, and enhanced medication management intelligence.

In July 2021, Omnicell’s long-time partner Spartanburg Regional Healthcare System selected the company’s medication management platform to enhance efficiency, control, and safety across the care continuum. Through this collaboration, Omnicell’s Central Pharmacy Dispensing and IV Compounding Services will aid Spartanburg Regional in its journey toward zero-error medication management and the fully autonomous pharmacy.

Share Price Performance

The stock has outperformed its industry over the past year. It has rallied 116.4% against the industry’s 15.4% decline.

Zacks Rank and Other Key Picks

Currently, Omnicell carries a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks from the broader medical space are Envista Holdings Corporation NVST, BellRing Brands, Inc. BRBR, and Henry Schein, Inc. HSIC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank stocks here.

Envista Holdings has an estimated long-term earnings growth rate of 27%.

BellRing Brands has an estimated long-term earnings growth rate of 29%.

Henry Schein has a projected long-term earnings growth rate of 14%.



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