Healthcare Management Systems Announces Capital Investment

NASHVILLE, Tenn.--(BUSINESS WIRE)--Healthcare Management Systems, Inc. (“HMS”) announced today that the company has closed an equity investment and recapitalization led by Primus Capital Funds (“Primus”) of Cleveland, Ohio. Founded in 1984 and based in Nashville, Tennessee, HMS is a provider of integrated information technology solutions and business services to community and specialty hospitals across the country. National City Equity Partners and LMS Capital participated in the equity investment with Primus. NewStar Financial, Inc. provided debt capital in support of the transaction.

“This transaction enabled HMS’ shareholders to achieve significant liquidity while also providing the Company with the capital to enhance existing and develop new product applications and explore acquisition opportunities”

The new investment in HMS represents an opportunity to continue to expand the company’s current growth and enhance the development of HMS’s technology product offerings. Brentwood Capital Advisors LLC acted as exclusive financial advisor on the transaction, which represents one of the largest private investments this year for a Tennessee-based company.

“HMS is a fast-growing company in a fast-changing competitive marketplace. Our success as a company has always been based on delivering quality products, services and support to our customers. This partnership allows us to continue our path of fast growth and increase our product offerings to more aggressively compete and expand our market share,” said Tom Stephenson, president of HMS. “As an employee-owned company, this investment partnership allows our employees to be rewarded for their commitment and hard work and participate in the future success of HMS.”

“This transaction enabled HMS’ shareholders to achieve significant liquidity while also providing the Company with the capital to enhance existing and develop new product applications and explore acquisition opportunities” said Kevin Murphy, Managing Partner of Brentwood Capital Advisors LLC.

Currently HMS provides integrated hospital IT solutions to over 550 hospitals across 48 states. The company offers clinical solutions, financial solutions, and enabling technologies for hospitals and has had strong growth in the acute care, behavioral and long term acute care marketplaces. In addition, many of their clients include corporate hospital systems that manage multiple hospitals nationwide.

“HMS has a 23 year-plus history of providing essential clinical and business technology solutions and services to healthcare professionals all across the country. We are looking forward to working with the HMS management team to help the company continue to grow,” said Phil Molner, Managing Director of Primus Capital Funds.

About HMS

Healthcare Management Systems, Inc.® (“HMS”) is a Nashville-based healthcare company that develops, sells and supports integrated clinical and financial hospital information systems and services. Founded in 1984, HMS counts among its customers Rural and Community hospitals, Behavioral, Rehabilitation and Long-term Acute Care facilities and Multi-Entity healthcare organizations nationwide. With the HMS system, caregivers are able to increase their efficiency in delivering quality care with an emphasis on improving patient safety. For more information, please visit www.hmstn.com or call 800.383.3317.

About Primus Capital Funds

Founded in 1983, Primus Capital Funds (“Primus”) is a private equity firm that invests in high-growth companies within the healthcare, business services, communications, and for-profit education industry sectors. Transaction types include management-led buyouts, control and non-control recapitalizations, and primary infusions of growth capital. More information about Primus can be found at http://www.primuscapital.com.

About National City Equity Partners

National City Equity Partners (NCEP) is a Cleveland, Ohio-based private equity firm with approximately $1 billion of capital under management. NCEP has been active in private equity for more than a quarter of a century. Founded in 1979, NCEP is one of the oldest bank-affiliated private equity groups in the United States.

About LMS Capital

LMS Capital is a London-based, AIM-listed company that has a 40-year history of private equity and venture capital investing in both the US and Europe. LMS Capital typically invests in companies and sectors that have the potential for superior growth over the medium to long term and where management has extensive prior investment experience. These include the following sectors: Healthcare and Medical, Energy, Applied Technology, and Media and Leisure. More information about LMS Capital can be found at www.LMSCapital.com.

About NewStar Financial, Inc.

NewStar Financial, Inc., headquartered in Boston MA, is a specialized commercial finance company focused on meeting the complex financing needs of customers in the middle market through our corporate, commercial real estate, and structured products groups. NewStar typically works with customers with financing needs of up to $150 million and cash flow as low as $5 million.

About Brentwood Capital Advisors LLC

Brentwood Capital Advisors LLC (“BCA”), founded in 1999, is a privately held investment bank headquartered in Nashville, Tennessee. BCA specializes in providing mergers and acquisition and capital raising advisory services to middle market companies. More information about Brentwood Capital Advisors can be found at http://www.brentwoodcapital.com.