Genstar Capital Announces Investment in Netsmart Technologies

Supports Expansion of Leading Healthcare IT Provider for Behavioral and Public Health Sectors

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Jun 22, 2010, 12:30 ET

SAN FRANCISCO, June 22 /PRNewswire/ -- Genstar Capital, LLC, a private equity firm that focuses on investments in selected segments of the software, healthcare, financial services, and industrial technology industries, today announced its investment in Netsmart Technologies, Inc. Genstar Capital will provide the capital and strategic software and healthcare expertise to help Netsmart manage its continued growth and expand its solutions to meet the needs of its customers in an increasingly complex industry environment.

Headquartered in Great River, N.Y., Netsmart provides software as a service (SaaS), self-hosted software solutions and project implementation services to more than 18,000 customer organizations in all 50 states, including 350,000 care providers and 40 state-level mental health systems. Netsmart customers include mental health and substance abuse treatment agencies, psychiatric hospitals, private and group mental health practices, public health departments, intellectual and developmental disabilities organizations, vital records offices and managed care organizations.

"We are excited to be partnering with the management team of Netsmart Technologies, the #1 software provider for the behavioral health, public health and substance abuse markets. Netsmart's deep domain expertise combined with their comprehensive software solutions provide significant value to its customer community today by increasing user productivity and decreasing costs," said Mark Hanson, managing director, Genstar Capital. "The capital investment will allow Netsmart to further accelerate its leadership position through expansion of its go-to-market capabilities and additional add-on acquisitions to drive incremental functionality and value for its customers."

Mr. Hanson added that with the backing of Genstar, Netsmart can even more proactively invest in and develop solutions that help customers meet current and evolving industry requirements that will further fuel demand for its services. This investment will help Netsmart enhance its products to allow customers to meet current and future stages of Meaningful Use, which enables healthcare providers to receive Medicare and Medicaid incentive funds for the "meaningful use" of a certified Electronic Health Record authorized under provisions of the American Recovery and Reinvestment Act of 2009 (ARRA).

James L. Conway, Netsmart chief executive officer, said, "Genstar's long-term focus and deep software and healthcare experience are a perfect fit to take Netsmart, our customers, and our industry leadership to the next level. Their capital investment, combined with the strong expertise in healthcare IT strategy and management they will bring to our board of directors, will add tremendous value as we continue to develop customer-focused solutions. The Netsmart team is excited by this opportunity, and we look forward to working closely with our new partners at Genstar."

Genstar received legal counsel from Latham & Watkins LLP. Financing for the transaction was provided by Wells Fargo Capital Finance, LLC and Ares Capital Corporation.

About Genstar Capital, LLC

Genstar Capital (www.gencap.com) is a leading private equity firm that has been actively investing in high quality companies for more than 20 years. Based in San Francisco, Genstar works in partnership with its management teams and its network of operating executives and strategic advisors to transform its portfolio companies into industry-leading businesses. Genstar has more than US$3 billion of committed capital under management and targets investments focused on selected sectors within the software, healthcare, financial services, and industrial technology industries.

About Netsmart Technologies, Inc.

Netsmart Technologies (www.ntst.com) is an established, leading supplier of enterprise software and software as a service (SaaS) solutions for health and human services providers. More than 18,000 customer organizations, including 350,000 care providers and 40 state systems, use Netsmart products to help improve the quality of life for millions of people each year.

Netsmart customers include mental health and substance abuse treatment agencies, psychiatric hospitals, private and group mental health practices, public health departments, 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 provides expertise and solutions that help its customers meet the evolving definition of "meaningful use" under the American Recovery and Reinvestment Act (ARRA) of 2009. These include experience in electronic health record certification, the InfoScriber™ e-prescribing service, the Netsmart CareConnect™ service that enables the sharing of clinical information through health information exchanges, the Netsmart ConsumerConnect™ Web portal to provide consumer access to their care information, and a flexible platform to capture and share outcomes data.

Netsmart's Connected Care initiative allows behavioral and public healthcare providers to share clinical data electronically within their internal processes, externally with other providers, and with consumers via a Web-based portal, enabling high quality, consumer-directed care.

For information about Netsmart Technologies' full range of solutions for health and human services organizations, visit www.ntst.com or call 1-800-421-7503, Option 6.

InfoScriber, Netsmart CareConnect and Netsmart ConsumerConnect are trademarks of Netsmart Technologies, Inc.