Allscripts Healthcare Solution has entered into a definitive agreement to acquire McKesson Corp.'s hospital and health system information technology business, Enterprise Information Solutions.

The deal is valued at $185 million in cash, subject to adjustment for net debt and working capital.

Allscripts will invest in, and continue to offer, Enterprise Information Solutions' Paragon product as the integrated electronic health records and revenue cycle management solution for the small hospital market.

The transaction is scheduled to close in the fourth quarter. Allscripts said it intends to fund the purchase through its existing secured credit facilities and cash balances.