Transaction strengthens Nightingale's balance sheet and positions Company
to focus on driving growth of EMR business
MARKHAM, ON, Feb. 29 /CNW/ - Nightingale Informatix Corporation ("Nightingale" or the "Company") (TSX-V: NGH), one of North America's fastest growing healthcare software and services providers, today announced the sale of its Therapist Helper business to Netsmart Technologies Inc., a leading provider of enterprise-wide software and services for health and human services organizations, for $12.3 million less any collected deferred revenue. All figures are in US dollars unless otherwise specified.
"We are sharpening our focus on the markets where we want to continue to lead," said Sam Chebib, president and CEO, Nightingale Informatix. "Since the behavioural health industry is not central to our strategy, we saw limited opportunity to leverage our core strengths in EMR to drive continued growth through our Therapist Helper business. We are building momentum in the North American EMR software and associated services market, and with this sale we will strengthen our balance sheet, particularly by paying down a portion of our debt, and focus our resources on the key growth areas of our business."
Under the terms of the sale, Nightingale will receive gross proceeds of $12.3 million, less $1.3 million in deferred revenue collected by Nightingale prior to closing, for net proceeds of $11 million. In addition, if Therapist Helper meets certain financial targets within the first year following the sale, Nightingale would also receive a one-time deferred purchase price payment of up to $1.1 million. For the nine months ended December 31, 2007, Therapist Helper generated $3.3 million in revenue.
In conjunction with the sale, Nightingale entered into a perpetual license and reseller agreement with Netsmart for the provision of Nightingale's SecureConnect(TM), a proprietary claims processing technology platform. Under a revenue sharing and royalty fee agreement, Netsmart will deploy SecureConnect to its behavioural health client base.
Therapist Helper provides practice management and billing software applications specifically to psychologists, psychiatrists and other therapy related providers such as speech therapists, physical therapists and chiropractors.
In April 2007, Nightingale acquired VantageMed Corporation for approximately $13 million. Therapist Helper was one of four businesses obtained as part of the transaction. The acquired businesses were Therapist Helper, RidgeMark, Northern Health and SecureConnect.
Nightingale is one of the fastest growing health care service and software companies in North America with over 4.7 million patient records under management in a hosted (ASP) environment. It is recognized as an industry leader in Web-based clinician and community based electronic medical records (EMR) serving the needs of small primary care practices, multi-physician outpatient clinics, and large scale regional health organizations and networks. Coupled with integrated practice management, transcription and revenue cycle management, Nightingale's comprehensive service offering allows customers to enhance patient care, increase revenue opportunities and optimize operations. Nightingale is continuously innovating and enhancing its services to meet the needs of its growing and diverse customer base. Nightingale - Healthcare connected. www.nightingale.md.
About Netsmart Technologies, Inc.
Netsmart Technologies, Inc., based in Great River, N.Y., is an established, leading supplier of enterprise-wide software solutions for health and human services providers. More than 18,000 customers use Netsmart products to help improve the quality of life for more than 20 million people each year.
Netsmart's clients include health and human services organizations, public health departments, mental health and substance abuse clinics, psychiatric hospitals, private and group mental health practices, vital records offices and managed care organizations. Netsmart's products are full-featured information systems that operate on a variety of operating systems, hardware platforms, and mobile devices, and offer unlimited scalability.
Netsmart is privately owned by Insight Venture Partners, Bessemer Venture Partners, Salmon River Capital and the Netsmart executive management team.
Forward Looking Statement
This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward- looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may" ,"could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Nightingale to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the speculative nature of the medical software industry, which is affected by numerous factors beyond Nightingale's control; the existence of present and possible future government regulation; the significant and increasing competition that exists in the medical software industry; the early stage of Nightingale's business; and therefore it is subject to the risks associated with early stage companies, including uncertainty of revenues, markets and profitability and the need to raise additional funding.
Although Nightingale has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Nightingale does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws. Further information on Nightingale Informatix Corporation is available at www.sedar.com.
The TSX Venture Exchange Inc. has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.