Insight Venture Partners Leads Netsmart Technologies’ Public-to-Private Transaction

Investment Consortium Includes Bessemer Venture Partners, Salmon River Capital and Netsmart Management

New York, N.Y. and Larchmont, N.Y. (April 10, 2007) – Insight Venture Partners Leads Netsmart Technologies’ Public-to-Private Transaction,Investment Consortium Includes Bessemer Venture Partners, Salmon River Capital and Netsmart Management,New York, N.Y. and Larchmont, N.Y.,Insight Venture Partners, a leading private equity investor in growth-stage and mid-size technology companies, and Bessemer Venture Partners, the oldest venture capital practice in the U.S., today announced the close of the public-to-private transaction of Netsmart Technologies, Inc. following the majority approval of the company’s shareholders. Joining Insight in the transaction are Salmon River Capital and members of Netsmart’s executive management team.

Netsmart Technologies, Inc., [Nasdaq SC:NTST] based in Great River, N.Y., is an established, leading supplier of enterprise-wide software solutions to more than 1,300 customers, including health and human services organizations, public health agencies, mental health and substance abuse clinics, psychiatric hospitals, and managed care organizations. Netsmart’s solutions enable these organizations to enhance clinical care and achieve higher efficiencies in their financial and management back-office processes.

“Netsmart’s technology supports the delivery of quality healthcare and service by their customers to million of Americans,” said Larry Handen, managing director, Insight Venture Partners. “We have been impressed by the quality and dedication of Netsmart’s management team in proactively meeting market’s needs in new areas like electronic health records, consumer-directed healthcare, emergency response and bio-terrorism preparedness. We look forward to supporting organic and acquisition growth in this new phase of the company’s evolution.”

James L. Conway, CEO of Netsmart Technologies stated: “We are very pleased to partner with our new investors to support Netsmart as we scale and work within a changing marketplace. Insight, Bessemer and Salmon River bring years of experience in technology and healthcare, a combination which complements our domain knowledge and capabilities. This partnership will build on our existing strong foundation as we continue to focus on creating long-term value for our customers and all stakeholders.”

“Bessemer believes that the healthcare software market has very attractive growth characteristics, as demonstrated by Netsmart’s performance,” observed Bob Goodman, managing partner, Bessemer Venture Partners. “We look forward to working with the company’s talented management team and with our co-investors to help Netsmart provide the behavioral health, substance abuse and public health markets with the technology they need to provide the highest quality of care.”

Joining Netsmart Technologies’ new board of directors are Larry Handen and Peter Sobiloff, managing directors at Insight Venture Partners; Bob Goodman, managing partner at Bessemer Venture Partners, and S. Joshua Lewis, founder and managing principal of Salmon River Capital. Richard Wells, vice president at Insight, will also sit on the board. James L. Conway, in his position as CEO, will represent the company.

Insight Venture Partners was represented by O’Melveny & Myers LLP. Proskauer Rose LLP advised Bessemer Venture Partners. Salmon River Capital was advised by Fried, Frank, Harris, Shriver and Jacobson LLP. Netsmart Technologies was advised by Farrell Fritz, P.C.
Debt financing was provided by Wells Fargo Foothill.

Source: Netsmart