Netsmart Technologies Announces Agreement to Acquire CMHC Systems, Inc. and Private Placement of Securities
September 20 2005 - 2:04PM
PR Newswire (US)
GREAT RIVER, N.Y., Sept. 20 /PRNewswire-FirstCall/ -- Netsmart
Technologies, Inc. (NASDAQ:NTST), a leading supplier of
enterprise-wide software solutions for health and human services
providers through its wholly owned subsidiary, Creative
Socio-Medics Corp. (Creative), announced today that it has entered
into a definitive agreement to acquire Dublin, Ohio-based CMHC
Systems, Inc. for approximately $13 million in cash and 435,730
shares of Netsmart common stock. Founded in 1978, CMHC Systems
delivers full suites of behavioral healthcare information
management software for mental health, substance abuse, and
addiction services agencies, developmental disability centers and
behavioral health-related managed care organizations. The
transaction is subject to certain conditions and it is anticipated
that the merger will be completed by the end of September 2005.
Following the acquisition, CMHC Systems and Creative Socio-Medics
will operate as one company under the name Netsmart Technologies,
Inc. James Conway, CEO of Netsmart, said, "The consummation of this
acquisition is expected to effectively unite the resources of two
of the largest information technology companies in health and human
services. By combining the strengths of Creative Socio-Medics and
CMHC Systems, we believe inpatient, outpatient, institutional and
community-based systems will view us as a single source for
solutions to their IT needs. We are very excited by the
opportunities that lie ahead and look forward to serving an
expanded community of agencies with proven solutions for all
modalities of care." The new combined company is expected to
positively impact health and human services providers by expanding
and building upon the strengths of the two organizations and
leveraging their role as leaders and innovators. In making today's
announcement, Conway emphasized that the acquisition will provide
our clients with a trusted partner now and into the future. "We
anticipate that this acquisition will better position our company
to offer long-term technology solutions," he concluded. Under
Conway's direction, Netsmart has realized 28 consecutive quarters
of profitability. The company has grown to include in excess of
1,000 clients, including 30 statewide systems. Netsmart's customer
base exceeds that of any of its competitors and it is estimated
that tens of millions of people are touched by some form of the
Netsmart product suite. William Blair & Company acted as
financial advisor and issued a fairness opinion to the Company
related to the transaction. Netsmart also announced that is has
entered into contracts with certain institutional investors for a
private placement of units consisting of an aggregate 653,623
shares of its common stock and warrants to purchase 163,406 shares
of common stock. Netsmart will receive net proceeds of $5,700,000
million which proceeds will be used for working capital; including
acquisitions. The closing of the private placement is contingent
upon the acquisition of CMHC on or before November 3, 2005. Griffin
Securities, Inc. served as the placement agent. 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, now
with over 1000 clients, including 30 systems with state agencies.
Netsmart's clients include health and human services organizations,
public health agencies, mental health and substance abuse clinics,
psychiatric hospitals, 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. Statement on Behalf of
Netsmart Technologies, Inc. Statements in this press release may be
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as
"anticipate," "believe," "estimate," "expect," "intend" and similar
expressions, as they relate to the company or its management,
identify forward-looking statements. These statements are based on
current expectations, estimates and projections about the company's
business based, in part, on assumptions made by management. These
statements are not guarantees of future performance and involve
risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may, and probably will,
differ materially from what is expressed or forecasted in such
forward-looking statements due to numerous factors, including those
described above and those risks discussed from time to time in
Netsmart's filings with the Securities and Exchange Commission. In
addition, such statements could be affected by risks and
uncertainties related to product demand, market and customer
acceptance, competition, pricing and development difficulties, as
well as general industry and market conditions and growth rates,
and general economic conditions. Any forward-looking statements
speak only as of the date on which they are made, and the company
does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of this
release. Information on Netsmart's or Creative's website do not
constitute a part of this release. DATASOURCE: Netsmart
Technologies, Inc. CONTACT: Ron Marge of Netsmart Technologies,
1-800-421-7503, ext. 2026, ; or Stuart Fine of Carpe DM, Inc.,
+1-908-490-0075, Web site: http://www.netsmartech.com/
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