Transaction strengthens Nightingale's balance sheet and positions Company to focus on driving growth in Canada and International markets
MARKHAM, ON, Oct. 5, 2015 /CNW/ - Nightingale Informatix Corporation ("Nightingale" or the "Company") (TSX-V: NGH), today announced the sale of its US based Practice Management business, the "Business", to Pulse Systems, Inc. ("Pulse") a leading provider of Practice Management and EHR software and Revenue Cycle Management services in the United States. Gross proceeds from the sale are $11 million, less working capital adjustments. The sale includes the assets of Nightingale's Medrium, RidgeMark, SecureConnect and Northern Health product lines. The Business represented approximately 35% of Nightingale's revenue for its fiscal year 2015. Nightingale will maintain the rights to develop, sell, and deploy its clearinghouse and claims hub technology (known as SecureConnect) in Canada and all international markets outside of the United States. Similarly, Pulse, under a License agreement, will have the right to enhance and further develop, sublicense and sell Nightingale V10 in the United States. All figures are in Canadian dollars unless otherwise specified.
This transaction was the result of Company's previously announced initiative to evaluate its strategic alternatives.
"This transaction strengthens our balance sheet and allows us to focus on deploying our suite of leading edge technologies including V10 and the SecureConnect clearinghouse into the Canadian market and international markets. We are sharpening our focus on the markets where we see substantial opportunity and where we want to continue to lead," said Sam Chebib, President and CEO of Nightingale. "We will be using a portion of the proceeds to pay down certain debt and the balance for working capital and operations. Nightingale is now well positioned to focus its energy on capitalizing on multiple large opportunities in the Canadian and International markets"
Under the terms of the sale, Nightingale will receive gross proceeds of $11.0 million, less $3.0 million of holdbacks. In addition, if the Business meets certain financial targets within the first six months post-closing, Nightingale would also receive a one-time additional payment of $1.75 million.
In conjunction with the sale, Nightingale entered into a mutual non-competition agreement with Pulse for a period of three years, whereby Nightingale would not compete in the United States market, while Pulse would not compete in Canada.
Jeff Burton, Pulse Systems President and CEO stated, "We are excited about this acquisition and the strength of the healthcare IT professionals that will be joining the Pulse team upon closing along with the clients that they serve." Following the closing, the Pulse focus with its new US clients will be to upgrade and advance each medical organization into the growing Pulse offering of state-of-the-art technology and service solutions. These solutions enable each medical organization to leverage the power and simplicity of Pulse's suite of fully-integrated proprietary products offered in both client server and cloud environments.
This transaction is subject to TSX.V approval and other customary closing conditions.
Pulse provides certified, integrated, electronic health care management systems to thousands of providers across more than 40 specialties nationwide. Pulse's award-winning, interoperable technology platform includes easy-to-use, cost-efficient Complete EHR, Practice Management, e-prescribing, Billing and Collections, and other Revenue Cycle Management solutions. Pulse is committed to helping our physician partners gain greater workflow efficiencies, reduce costs and achieve Meaningful Use incentives – all supported by our best-in-class client support, training and implementation services.
Pulse is part of the Cegedim Healthcare Software division, owned and operated by Cegedim, a global health care technology company. To learn more or to request a demonstration of Pulse's solutions, please visit us at www.pulseinc.com or call 1.800.444.0882
For more than a decade, Nightingale (TSX-V: NGH) has been delivering innovative cloud-based Electronic Health Record (EHR) , Practice Management and Claims Clearing House solutions to healthcare organizations across the United States and Canada. Our goal is to uncomplicate the day-to-day challenges of healthcare providers. We achieve this by creating software that is truly intuitive—minimizing training and maximizing adoption. We believe so strongly in building easy-to-use software that we structured our entire product team around user-centric design. Our clients are benefiting from this focus through a well-supported and robust solution that presents a holistic view of a person's well-being in a simple, clean interface, so that the best health decisions can be made. Nightingale – One Patient. One Record. www.nightingalemd.com
Forward Looking Statement
This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, forward-looking statements can be identified by the use of forward- looking terminology such as "plans", "expects" or "does not expect", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may" ,"could", "would", "might", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Nightingale to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: the ability of Nightingale to close the sale of assets to Pulse; the ability of Nightingale to service the interest on its debt and to repay the principal on its debt; risks associated with obtaining the required approval of the Exchange and other approvals related to its debt; risks related to the speculative nature of the medical software industry, which is affected by numerous factors beyond Nightingale's control; the ability of Nightingale to successfully secure customer contracts and the timing of securing such contracts; the ability of Nightingale to successfully develop and market the V10 platform; the ability of Nightingale to complete and successfully integrate its acquisitions on an accretive basis, Nightingale's access to debt and capital facilities, including compliance with current debt arrangements; the existence of present and possible future government regulation; the significant competition that exists in the medical software industry; the early stage of Nightingale's business, and risks associated with early stage companies, including uncertainty of revenues, markets and profitability and the need to raise additional funding. All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends. Certain material factors or assumptions applied by management in making forward-looking statements, include without limitation, factors and assumptions regarding future trends in healthcare spending, economic conditions affecting Nightingale and North American economies; Nightingale's ability to continue to fund its business, rates of customer defaults, relationships with, and payments to lenders, as well as Nightingale's operating cost structure.
Although Nightingale has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Nightingale does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws. Further information on Nightingale Informatix Corporation is available at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Nightingale Informatix Corporation
For further information: David Toews, CFO, Nightingale Informatix Corporation, Tel: 905-943-2600, [email protected]; Sam Chebib, CEO, Nightingale Informatix Corporation, Tel: 905-943-2611, [email protected]