GI Partners and TA Associates have agreed to acquire a stake in Netsmart Technologies Inc. The seller is Allscripts Healthcare Solutions Inc. No financial terms were disclosed. The deal is expected to close this month. As a result of this transaction, GI Partners, which originally invested in Netsmart in April 2016, is now a majority owner. Netsmart is a provider of software and technology solutions for the health and human services and post-acute sectors.
SAN FRANCISCO, December 10, 2018 – GI Partners (“GI”), a leading private equity firm, together with TA Associates (“TA”) announced today that it has signed a definitive agreement to acquire the stake held in Netsmart Technologies, Inc. (“Netsmart”) by Allscripts Healthcare Solutions, Inc. (NASDAQ: MDRX). This transaction represents an additional investment for GI Partners over its initial stake acquired in April 2016, and results in majority ownership of Netsmart by GI Partners. This transaction will further build out Netsmart as the leading provider of human services and post-acute technology in healthcare.
Founded in 1968, Netsmart is the leading provider of software and technology solutions designed especially for the health and human services and post-acute sectors, enabling mission-critical clinical and business processes including electronic health records, population health, billing, analytics and health information exchange. Since GI Partners’ investment in 2016, Netsmart has experienced considerable growth through product innovation and multiple strategic acquisitions. During this time, Netsmart launched myUnity, the only multi-tenant SaaS platform serving the entire post-acute care continuum, and successfully completed strategic acquisitions in human services and post-acute care technology. Over the same period, Netsmart has added 150,000 users and over 5,000 organizations to its platform.
Dave Kreter, Managing Director of GI Partners, said, “We thank Allscripts for their partnership and look forward to the next chapter of growth with our new partners, TA Associates. We are excited to support management as they continue down the path of making Netsmart the largest HCIT provider outside of the hospital walls.”
Howard Park, Managing Director of GI Partners, said, “We continue to strongly believe Netsmart represents an attractive business that aligns with our focus on healthcare, IT infrastructure, and software. We are excited to work with the company and TA to focus on the next phase of growth for the business.”
Mike Valentine, Chief Executive Officer of Netsmart, who will continue in that capacity, said, “The GI and TA teams have substantial relevant investing and operating experience in the end-markets and industries in which Netsmart serves. We look forward to our continued partnership with GI and new relationship with TA for the next chapter of growth.”
The transaction is subject to customary closing conditions and is expected to be completed in December 2018.
J.P. Morgan Securities LLC and Evercore acted as financial advisors to Allscripts and Sidley Austin provided legal counsel. Paul Hastings provided legal counsel to GI Partners. Kirkland & Ellis provided legal counsel to TA Associates.
Netsmart develops electronic health records (EHRs), solutions and services that are powerful, intuitive and easy-to-use. Its platform provides accurate, up-to-date information which is easily accessible to care team members in behavioral health, care at home, senior living and social services. Netsmart employs over 1,700 associates to work hand-in-hand with its 600,000+ users in more than 25,000 organizations across all 50 states in the U.S. to develop and deploy technology that automates and coordinates everything from clinical to financial to administrative. Visit www.ntst.com.
About GI Partners
GI Partners is a private investment firm based in San Francisco. The firm has raised over $17 billion in capital from leading institutional investors around the world. GI Partners’ private equity team focuses on investments in the Healthcare, IT Infrastructure, Services, and Software sectors. For more information on GI Partners and its entire portfolio, please visit www.gipartners.com.