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Neoforma, Eclipsys Scuttle Merger

May 26, 2000|Bloomberg News

Neoforma.com Inc., an Internet service to connect buyers and sellers of medical supplies, and software maker Eclipsys Corp. ended a merger plan after their shares fell more than 60% in two months. Instead, Neoforma.com will sell a 45% stake to Novation, the world's biggest buyer of health-care equipment, in return for a 10-year purchasing contract. Neoforma also said it will cut about 80 jobs, or 28% of its work force, in part because of the Novation agreement. Since March, when Neoforma.com unveiled a $4.2-billion stock purchase of Eclipsys and its affiliate Healthvision Inc., a manager of hospital Web sites, analysts speculated that the transaction could fall apart. Novation is owned by VHA Inc. and University HealthSystem Consortium, two alliances of hospitals and health-care centers. Santa Clara, Calif.-based Neoforma.com fell $1.44 to close at $9.50, while Eclipsys, based in Delray Beach, Fla., fell 75 cents to $6.81, both on Nasdaq.

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