GI Partners said Tuesday it agreed to buy Netsmart Technologies Inc. Genstar Capital is the seller. Financial terms weren’t announced. Allscripts Healthcare Solutions Inc is partnering in the deal and will merge its homecare software business unit with Netsmart. Overland Park, Kansas-based Netsmart provides software and technology solutions designed especially for the health and human services sector. UBS Investment Bank is providing financing. Houlihan Lokey and UBS Investment Bank acted as financial advisors.
SAN FRANCISCO, March 23, 2016 – GI Partners (“GI”), a leading middle market private equity firm, announced today that it has signed a definitive agreement to acquire Netsmart Technologies, Inc. (“Netsmart”). GI Partners is acquiring Netsmart in partnership with Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX), which will merge its Allscripts’ homecare software business unit with Netsmart (“Henderson”) to firmly establish Netsmart as the largest human services and post-acute technology provider in healthcare.
Netsmart is the leading provider of software and technology solutions designed especially for the health and human services sector, enabling mission-critical clinical and business processes including electronic health records, patient management, billing, scheduling and clinical care delivery. Allscripts’ homecare business is a fully integrated system for both large and small home care organizations, automating point of care processes as well as patient intake and billing. The combination of Netsmart and Allscripts’ homecare business creates an electronic health record leader in the human services and post-acute spaces with full revenue cycle management and hosting capabilities.
Dave Kreter, Director of GI Partners, said, “We are excited to partner with Netsmart management to continue to build upon the market leadership they have achieved in the behavioral healthcare technology space and strategically expand the business across the post-acute landscape. This is a team we have been interacting with over the last decade and are thrilled to have signed a transaction with them. The GI team believes this combination will create an industry leader that can improve clinical results and reduce costs in many increasingly important areas of the healthcare ecosystem.”
Howard Park, Managing Director of GI Partners, said, “We believe Netsmart represents an attractive investment for GI that is very much ‘on strategy’ with our focus on post-acute and behavioral healthcare, IT infrastructure, and verticalized healthcare software. Given our combined significant experience in the healthcare and technology sectors, GI is the ideal partner to add value to the full combined Netsmart business.”
Mike Valentine, Chief Executive Officer of Netsmart, who will continue in that capacity for the combined company, said, “The GI team has substantial relevant investing and operating experience in the end-markets and industries in which Netsmart and Allscripts’ homecare business serve. We look forward to our partnership with GI to further improve healthcare quality and service at lower cost.”
The transaction is subject to customary regulatory and closing conditions and is expected to be completed in April 2016.
Houlihan Lokey and UBS Investment Bank acted as financial advisors. Financing for the transaction is being provided by UBS Investment Bank.
Netsmart provides technology and expertise to help health and human services providers deliver effective, outcomes-based services and care to more than 25 million persons nationwide. Netsmart clients include 450,000 users in 20,000 in organizations across all 50 states. Netsmart clients include mental health and addiction services agencies, health homes, psychiatric hospitals, private and group mental health practices, public health departments, social services, child and family services agencies, managed care organizations and vital records offices.
Allscripts (MDRX) is a leader in healthcare information technology solutions that advance clinical, financial and operational results. Our innovative solutions connect people, places and data across an Open, Connected Community of Health™. Connectivity empowers caregivers to make better decisions and deliver better care for healthier populations. To learn more, visit www.allscripts.com, Twitter, YouTube and It Takes A Community: The Allscripts Blog.
About GI Partners
Founded in 2001, GI Partners is a leading middle market private equity firm based in San Francisco. The firm currently manages over $12 billion in capital commitments through private equity and real estate strategies for recognized institutional investors across the globe. GI Partners’ private equity team is active in a number of key sectors, including Technology, Media & Telecommunications, Healthcare, Retail & Leisure, and Business & Financial Services. For more information on GI Partners and its entire portfolio, please visit www.gipartners.com.