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PE-backed Netsmart Technologies exploring sale

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Illustration: Sarah Grillo/Axios

GI Partners and TA Associates-backed health software company Netsmart Technologies is exploring a sale, Axios has confirmed.

Why it matters: The news could spark the muted health care services LBO market to life.

What's happening: Netsmart could be valued at $5 billion-plus including debt in a sale, one source close to the process tells Axios, confirming a Reuters report citing sources familiar.

  • However, a more likely valuation may be closer to $4 billion to $4.25 billion, another source close tells Axios.
  • Netsmart expects to generate about $250 million in EBITDA this year and it is working with Goldman Sachs and William Blair to launch a process in the coming weeks, per Reuters.

Catch up fast: Founded in 1968, Netsmart provides electronic health records services, healthcare information exchange services and telehealth software.

  • In 2016, GI Partners formed a joint venture with Allscripts to buy Netsmart for about $950 million from Genstar Capital.
  • Two years later, GI Partners and TA Associates partnered to buy out Allscripts Healthcare's stake in Netsmart for an undisclosed price.

Goldman declined to comment; the other parties did not immediately respond to a request for comment.

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