King & Spalding partner Jack D. Capers Jr. landed client Eclipsys Corp., the Atlanta-based health care data technology company that last week announced plans for a $1.3 billion merger with Allscripts-Misys Healthcare Solutions Inc., because of a deal he closed a few years ago.

That deal, he said, was the sale of Alpharetta-based medical software provider Per-Se Technologies to health care company McKesson Corp., based in San Francisco, for more than $1 billion.

"Eclipsys is a new client," he said. "The CEO is Phil Pead, who was previously CEO of Per Se Technologies."

Thanks to the connection from that earlier deal, Capers, along with co-lead partner C. William Baxley and a team of 26 other lawyers from the firm's Atlanta, Washington, New York and London offices, began gearing up for the Eclipsys-Allscripts transaction about five months ago.

"We started working on the transaction in February, and it was pretty much full time, full speed ahead … to the announcement date [June 9]," Capers said.

Eclipsys offers software to hospitals and health systems, and Allscripts provides information systems for doctors' offices. The union, which Capers said is likely to close in four to six months, would facilitate patient information-sharing between those entities.

It's an all-stock deal, coming just 18 months after British company Misys bought a majority stake in Chicago-based Allscripts, Capers said.According to information from Bloomberg News, Misys paid $330 million for Allscripts in October 2008, and shares in the U.S. company have more than tripled in value since then.

"The world of electronic medical records has changed substantially in the last 18 months with the passage of health care reform and the stimulus money for hospitals and doctors to upgrade their electronic medical records," Capers said, referring to the approximately $30 billion in federal funding allocated for hospital and physician adoption of electronic health records under the American Recovery and Reinvestment Act. "Misys concluded there was an opportunity to generate significant return on this."

Capers said that the most unique feature of the transaction, in which Eclipsys stockholders will receive 1.2 shares of Allscripts for each share of Eclipsys—a 19 percent premium based on the June 8 closing price, according to the terms of the agreement—is a companion deal connected to the merger.

"Allscripts is currently 55 percent owned by Misys, which is a U.K. public company," he said. "Because of some London Stock Exchange rules, Misys was not going to be able to continue to own a major stake in Allscripts after the merger, so for the merger to go forward, Misys had to arrange to sell a substantial portion of its stake in Allscripts."

The London Stock Exchange, he explained, requires that a listed company control a majority by value of its assets. The merger with Eclipsys would have diluted that control such that Misys would have been in violation of the stock exchange's rules. Misys now plans to reduce its stake in Allscripts to 10 percent via an underwritten secondary offering of at least 36 million shares, and a share buyback. Allscripts will buy back about 24.4 million shares and pay a premium, for a total of $577.4 million, according to information from the companies.

"That added just an enormous layer of complexity to the deal," Capers said.

Before any of that can happen, all three companies must secure shareholder approval for, variously, the offerings and buyback. Capers' team is working on proxy materials now and expects shareholder votes in September or early October.

Also, Allscripts must land debt financing for the buyback. Capers said Allscripts already has some funding commitments. According to the company's merger announcement, it has financing commitments from J.P. Morgan, Barclays Capital and UBS for a total of $720 million in senior secured credit facilities.

"It's a complex transaction," he said. "I think the Eclipsys board feels comfortable that while there are conditions to the transaction, they are reasonable and achievable, and there's a high likelihood the transaction will close."

If it does, the combined company's client base will include more than 180,000 U.S. physicians, 1,500 hospitals and nearly 10,000 nursing homes, hospices, home care and other post-acute organizations.

Sidley Austin and Vedder Price represent Allscripts; Allen & Overy represents Misys.