| back

Healthcare Management Systems Announces Capital Investment

(Nashville, Tenn. October 4, 2007) – Healthcare Management Systems, Inc. (“HMS”) announced today that the company has closed an equity investment and recapitalization. Brentwood Capital Advisors LLC (“BCA”) acted as exclusive financial advisor to HMS. Primus Capital Funds (“Primus”) of Cleveland, Ohio led the private equity investment and New Star Financial, Inc. provided debt capital in support of the transaction. 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.

The new investment by Primus in HMS represents an opportunity to continue to expand the company’s current growth and enhance the development of HMS’s technology product offerings. This transaction 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.

“BCA conducted a highly targeted and competitive process that provided an attractive valuation and transaction to the HMS shareholders. In addition, BCA delivered senior-level attention and provided sound advice throughout the process,” said Tom Stephenson. “We are very pleased with this transaction and excited to be partnering with Primus.”

The HMS assignment exemplifies Brentwood Capital Advisors' focus on providing high quality investment banking advice to leading private healthcare and business services companies in this region.  In our healthcare services practice, HMS joins Passport Health Communications, HealthSpring, Psychiatric Solutions, Memphis Managed Care, BlueCross BlueShield of Tennessee and Symbion as another example of leading national healthcare services companies that we have been privileged to serve. Since 2002, BCA has completed 27 financial advisory transactions as exclusive financial advisor.
 

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 Brentwood Capital Advisors LLC
 
Brentwood Capital Advisors LLC, founded in 1999, is a privately held investment banking firm headquartered in Nashville, Tennessee, providing mergers and acquisition and capital raising advisory services to middle market healthcare and business services companies.  More information about Brentwood Capital Advisors can be found at http://www.brentwoodcapital.com/.