Veradigm changes up board of directors

Dive Brief:

• Veradigm is shaking up its board of directors about a month after the health IT company ended a strategic review.
• As part of a deal with investor Kent Lake PR, Veradigm has expanded its current board from five to six members, according to a securities filing last week.
• The health IT company named Vinit Asar, former CEO of orthotic and prosthetic firm Hanger, and Louis Silverman, CEO of telehealth company Hicuity Health, as new independent directors. Veradigm will also find two additional members to join the board, subject to Kent Lake’s approval, the health IT firm said in a press release. 

Dive Insight:

The health IT vendor, formerly known as Allscripts, is conducting an “orderly refreshment of the Board” as part of an agreement with Kent Lake, which owns about 4.2% of the company’s shares, Veradigm said in a Thursday press release. Until this summer, the investor will also be able to designate replacement directors if Asar or Silverman leave.

Several board members have stepped down or plan to resign. Elizabeth Altman and Jonathan Judge stepped down this year. Chairman Greg Garrison will also leave after the company files its annual report for its 2022 fiscal year, or on July 1, whichever is earliest, according to a securities filing. ​​​​​

The board shakeup comes after years of financial reporting challenges for Veradigm. The health IT vendor has not filed a financial report since November 2022 after the company determined several quarters worth of previous statements couldn’t be relied upon due to “internal control failures.”

The missing financial reports prompted Nasdaq to delist the health IT vendor from the stock exchange about a year ago. In January, the company said it planned to provide updated 2023 and preliminary 2024 unaudited financial ranges in mid-March. A Veradigm spokesperson declined to say when the company will release its 2022 financial report.

In May, Veradigm said it would review strategic alternatives to boost shareholder value, including a potential sale of the firm. 

But the company ultimately didn’t find a deal. Veradigm said five bidders submitted preliminary indications of interest, but it received no final proposals, according to a press release in late January. 

Ending the review without a sale suggests the company felt proposals undervalued Veradigm, and the company could create greater value by bringing its financial reports up to date and relisting, TD Cowen analysts said in a note last month.