Insight, Bessemer team on software take-private

Insight Venture Partners and Bessemer Venture Partners have teamed up with management executives of healthcare software provider Netsmart Technologies in a $115m going-private deal.

New York-based Insight Venture Partners and Menlo Park, California-based Bessemer Venture Partners have agreed to acquire Netsmart Technologies, a supplier of health and human service-related software based in Great River, New York, for approximately $115 million (€89.7 million), Netsmart said in a statement. Netsmart’s management will also take part in the deal.

Netsmart’s shareholders will receive $16.50 per share in cash under the terms of the agreement, the statement said. That amount is 23.5 percent more than Netsmart’s average closing price of $13.36 over the last 20 trading days on the NASDAQ stock exchange.

The transaction is expected to close early next year.

Led by chairman and chief executive officer James Conway, Netsmart provides software to more than 1,300 health and human services organizations, public health agencies, mental health and substance abuse clinics, psychiatric hospitals and managed care organisations, the statement said. Its software products operate on hardware platforms and mobile devices.

Founded in 1995 by managing directors Jerry Murdock and Jeff Horing, Insight Venture Partners invests in expansion stage and mid-market buyout transactions and focuses on companies in the software, technology and Internet services sectors. It currently has more than $2 billion in capital, the statement said.

Insight closed its fifth fund, worth $675 million, in May of 2005.

Operating since 1911, Bessemer Venture Partners is the oldest venture capital practice in the United States, the statement said. It has offices in Silicon Valley, Boston, New York, Shanghai, Mumbai and Bangalore and manages approximately $2 billion in venture funds.

Bessemer, in conjunction with Draper Fisher Jurvetson, Index Ventures and Mangrove Capital Partners, sold internet calling system Skype to online auctioneer eBay for $4.1 billion in cash and shares in September of 2005.