Netsmart Gets New Owner in $950 million sale

Netsmart Technologies, one of the region’s Top 100 private companies, based on revenues, has a new owner and an expanded mission: The Overland Park-based provider of IT products for behavioral health-care providers is being sold for $950 million to a joint venture between GI Partners of San Francisco and Allscripts Healthcare Solutions of Chicago. The change will allow the company to operate in other health-care venues, including home health and hospice care.

Allscripts is a public company whose shares are traded on the Nasdaq exchange, but Netsmart will  remain privately held, as neither member of the new partnership owns a stake of more than 50 percent. San Francisco-based Genstar Capital, another private equity firm, was Netsmart’s previous owner.

While the bulk of U.S. health-care spending takes place at hospitals and in medical pratices, Netsmart focuses on a share that accounts for roughly $400 billion in spending on other providers and services in behavioral health, and it serves more than 24,000 organizations with half a million providers.

“This is a major new phase in the journey for Netsmart,” CEO Mike Valentine said in a news release announcing the transaction. “Netsmart 1.0 was about creating solutions for behavioral health. Netsmart 2.0 was about creating breadth and depth in our solutions and services, and serving all of human services.” The next phase, he said, would be about growing Netsmart’s platform to serve all the parts of health care that traditionally sit outside the four walls of hospitals and physician practices. “It’s a huge opportunity to fill a gap to make all of health care come together,” Valentine said, “and as a company, we are ready to take it on.”