Netsmart Technologies Enters Into Definitive Agreement to Transition to a Private Company
November 20 2006 - 9:17AM
PR Newswire (US)
Purchase for $16.50 Per Share by Private Equity Firms With
Management Team Participation GREAT RIVER, N.Y., Nov. 20
/PRNewswire-FirstCall/ -- Netsmart Technologies, Inc.
(NASDAQ:NTST), a leading provider of enterprise-wide software for
health and human services organizations, today announced that it
has entered into a definitive agreement for Netsmart to be acquired
by Insight Venture Partners and Bessemer Venture Partners in a
transaction valued at approximately $115 million. Members of the
Netsmart executive management team will participate in the
ownership of the company. Under the terms of the agreement,
Netsmart Technologies shareholders will receive $16.50 in cash in
exchange for each share of Netsmart stock. The purchase price
represents a 23.5 percent premium to the average closing price over
the last 20 trading days of $13.36. The transaction is expected to
close in early 2007 subject to the receipt of stockholder and
regulatory approvals and satisfaction of other customary closing
conditions. The board of directors of Netsmart, acting on the
unanimous recommendation of a special committee of independent
directors, has approved the agreement and will recommend that
Netsmart's stockholders approve the merger. William Blair &
Company acted as exclusive financial advisor to Netsmart and issued
a fairness opinion in connection with the transaction. "We believe
this transaction will enable us to better scale for anticipated
growth, both organically and by acquisition, and will provide us
with easier access to capital for new product development and
technology innovations to better serve our customers," said James
L. Conway, chairman and CEO of Netsmart Technologies. "We made the
decision to team with Insight and Bessemer because they are
highly-regarded private equity firms that believe in the importance
of the behavioral health, public health and substance abuse markets
we serve." "Netsmart has an exceptional track record of delivering
high quality information technology solutions to its customers,"
said Larry Handen, managing director, Insight Venture Partners. "We
take pride in investing in companies that are 'doing well by doing
good,' and Netsmart fits that credo by providing software and
services to organizations that help millions of citizens each day."
"We are impressed by Netsmart's customer community, product
strength, target markets, future growth potential, and long term
financial stability," said Robert Goodman, general partner,
Bessemer Venture Partners. "BVP has a long history of investing in
companies that apply technology to the management and delivery of
healthcare. We look forward to working with Netsmart to help it
achieve even greater success as a private company." Upon closing,
Netsmart Technologies will no longer be publicly traded on the
NASDAQ stock market. Farrell Fritz, P.C. acted as legal counsel to
Netsmart and Patterson, Belknap Webb & Tyler, LLP acted as
legal counsel to the Special Committee. O'Melveny & Myers LLP
acted as legal counsel for Insight Venture Partners. Proskauer Rose
LLP Advised Bessemer Venture Partners. 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, with more than 1,300
clients, including more than 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. More than
120 public health organizations and 10 state health departments use
Netsmart to further their mission of providing citizens with high
quality public health care and services. 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. About Insight Venture Partners Insight
Venture Partners has raised over $2 billion in capital to invest in
leading software, technology and Internet services companies. From
our New York headquarters, Insight takes a global approach to
investing, providing hands-on execution and strategic advice to
ensure our portfolio companies benefit from Insight's cumulative
operational and financial experience. Insight was founded in 1995
and invests in, and partners with, expansion stage and mid-market
buyout transactions to create long-term value for all stakeholders.
For additional information, visit the Firm's website at
http://www.insightpartners.com/ About Bessemer Venture Partners
Bessemer Venture Partners is the oldest venture capital practice in
the United States. With offices in Silicon Valley, Boston, New
York, Shanghai, Mumbai, and Bangalore, the Bessemer group manages
two billion dollars of venture funds, carrying on a tradition of
hands-on, active investing that has continued since 1911. Over 100
Bessemer companies have gone public, including American
Superconductor, Ciena, Gartner Group, Ingersoll Rand, International
Paper, Maxim, Parametric, Perseptive Biosystems, Staples, VeriSign,
Veritas, and W.R. Grace. Forward-Looking Statements 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 subject to
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied in the forward-looking
statements. These factors include, but are not limited to, (1) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement; (2) the
outcome of any legal proceedings that have been or may be
instituted against Netsmart and others following announcement of
the proposal or the merger agreement; (3) the inability to complete
the merger due to the failure to obtain stockholder approval or the
failure to satisfy other conditions to the completion of the
merger, including the expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the
receipt of other required regulatory approvals; (4) the failure to
obtain the necessary debt financing arrangements set forth in
commitment letters received in connection with the merger; (5)
risks that the proposed transaction disrupts current plans and
operations and the potential difficulties in employee retention as
a result of the merger; (6) the ability to recognize the benefits
of the merger; (7) the amount of the costs, fees, expenses and
charges related to the merger and the actual terms of certain
financings that will be obtained for the merger; and (8) the impact
of the substantial indebtedness incurred to finance the
consummation of the merger; and other risks that are set forth in
Netsmart's filings with the Securities and Exchange Commission at
http://www.sec.gov/. Many of the factors that will determine the
outcome of the subject matter of this press release are beyond
Netsmart's ability to control or predict. Important Additional
Information Regarding the Merger will be filed with the SEC. In
connection with the proposed merger, Netsmart will file a proxy
statement with the Securities and Exchange Commission (the "SEC").
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY
STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES TO THE
MERGER. Investors and security holders may obtain a free copy of
the proxy statement (when available) and other documents filed by
Netsmart at the SEC website at http://www.sec.gov/. The proxy
statement and other documents also may be obtained for free from
Netsmart by directing such request to Netsmart Technologies, Inc.,
3500 Sunrise Highway, Great River, NY 11739, Attn: Anthony F.
Grisanti, telephone 631-968-2000. Netsmart and its directors,
executive officers and other members of its management and
employees may be deemed participants in the solicitation of proxies
from its stockholders in connection with the proposed merger.
Information concerning the interests of Netsmart's participants in
the solicitation, which may be different than those of Netsmart
stockholders generally, is set forth in Netsmart's proxy statements
and Annual Reports on Form 10-K, previously filed with the SEC, and
will be set forth in the proxy statement relating to the merger
when it becomes available. DATASOURCE: Netsmart Technologies, Inc.
CONTACT: Dave Kishler of Netsmart Technologies, +1-614-932-6723, or
Web site: http://www.ntst.com/ http://www.insightpartners.com/
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