HealthStream buys Sy.Med for $8M

Extra $1.5 million contingent on performance

Nashville-based HealthStream said Monday it has paid about $8 million in cash and stock to buy Sy.Med Development, a health care software firm based in Brentwood.

In a statement linked here, HealthStream officials say their planned integration of Sy.Med's physician credentialing software will boost the company's offerings to hospitals, many of which are growing their ranks of employed doctors. The deal also contains unidentified post-closing benchmarks that could add an additional $1.5 million to HealthStream’s purchase price. The extra money will be paid over a two-year period if goals are reached.

"I believe our credentialing application has saved tremendous resources for our clients — and I am, therefore, pleased that it will reach a wider audience as part of HealthStream,” said Sy.Med CEO Jim Aylward, who has led the company since 1997.

Sy.Med works with about 115 hospitals and more expansive health systems. One interesting note to this deal: Gerry Hayden, a former HealthStream director who has been that company's CFO since the spring of 2008, is a member of Sy.Med's board.

Investors reacted to the deal Monday morning by pushing down HealthStream shares (Ticker: HSTM) by about 1 percent to roughly $28. Year to date, the stock has climbed about 50 percent.