Netsmart Technologies Enters into Definitive Agreement to Transition to a Private Company

Purchase for $16.50 Per Share by Private Equity Firms With Management Team Participation

Great River, NY (November 20, 2006) – Netsmart Technologies, Inc. (NASDAQ SC: NTST), a leading provider of enterprise-wide software for health and human services organizations, today announced that it has entered into a definitive agreement for Netsmart to be acquired by Insight Venture Partners and Bessemer Venture Partners in a transaction valued at approximately $115 million. Members of the Netsmart executive management team will participate in the ownership of the company.

Under the terms of the agreement, Netsmart Technologies shareholders will receive $16.50 in cash in exchange for each share of Netsmart stock. The purchase price represents a 23.5 percent premium to the average closing price over the last 20 trading days of $13.36. The transaction is expected to close in early 2007 subject to the receipt of stockholder and regulatory approvals and satisfaction of other customary closing conditions.

The board of directors of Netsmart, acting on the unanimous recommendation of a special committee of independent directors, has approved the agreement and will recommend that Netsmart’s stockholders approve the merger. William Blair & Company acted as exclusive financial advisor to Netsmart and issued a fairness opinion in connection with the transaction.

“We believe this transaction will enable us to better scale for anticipated growth, both organically and by acquisition, and will provide us with easier access to capital for new product development and technology innovations to better serve our customers,” said James L. Conway, chairman and CEO of Netsmart Technologies. “We made the decision to team with Insight and Bessemer because they are highly-regarded private equity firms that believe in the importance of the behavioral health, public health and substance abuse markets we serve.”

“Netsmart has an exceptional track record of delivering high quality information technology solutions to its customers,” said Larry Handen, managing director, Insight Venture Partners. “We take pride in investing in companies that are ‘doing well by doing good,’ and Netsmart fits that credo by providing software and services to organizations that help millions of citizens each day.”

“We are impressed by Netsmart’s customer community, product strength, target markets, future growth potential, and long term financial stability,” said Robert Goodman, general partner, Bessemer Venture Partners. “BVP has a long history of investing in companies that apply technology to the management and delivery of healthcare. We look forward to working with Netsmart to help it achieve even greater success as a private company.”

Upon closing, Netsmart Technologies will no longer be publicly traded on the NASDAQ stock market.

Farrell Fritz, P.C. acted as legal counsel to Netsmart and Patterson, Belknap Webb & Tyler, LLP acted as legal counsel to the Special Committee.

O’Melveny & Myers LLP acted as legal counsel for Insight Venture Partners. Proskauer Rose LLP Advised Bessemer Venture Partners.

Source: Netsmart