Allscripts Forms JV To Acquire Netsmart - Quick Facts

(RTTNews) - Genstar Capital announced the signing of a definitive agreement to sell Netsmart Technologies, Inc., a supplier of enterprise software and software as a service (SaaS) solutions for health and human services providers. Allscripts Healthcare Solutions (MDRX) will combine resources with private equity firm GI Partners in a joint venture that will acquire Netsmart. The joint venture will combine the Allscripts Homecare business with Netsmart. Allscripts will contribute 100% of its Homecare business, plus approximately $70 million in cash to the joint venture. The consideration will be combined with the cash investment from GI Partners plus third-party debt financing. Allscripts will be the largest owner of the joint venture.

Allscripts said, on a pro-forma basis, excluding impact from any purchase accounting effects, the combination creates a company with more than $250 million in annual revenue and more than $60 million in annual operating income. Mike Valentine, Netsmart's CEO, will lead the combined company.

Allscripts management expects the transaction to add approximately $150 million in 2016 revenue, be accretive to 2016 adjusted EBITDA and neutral to non-GAAP earnings per share in 2016. The company's management will update its financial outlook for the transaction on its first quarter earnings conference call in early May 2016.