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Physician IT

Nightingale to acquire HealtheNet and Scribes

MARKHAM, Ont – Nightingale Informatix Corp., a major Canadian developer of Electronic Medical Record systems for physician practices, has announced plans to acquire the U.S. and Canadian assets of HealtheNet Inc., a leading healthcare information technology (IT) provider, and its affiliate, Scribes Inc.

HealtheNet, a Delaware company, has integrated its physician desktop technology with Scribes medical transcription services, offering its clients a seamless process for dictating clinical documents and distributing finished products to stakeholders.

HealtheNet shareholders will receive (Cdn) $7.125 million, payable in a combination of cash and Nightingale shares escrowed over a two year period, a component of which is conditional on future financial performance targets.

HealtheNet reported total revenues of approximately $5.5 million for the latest 12-month period ended August 31, 2005.

The transaction forms part of Nightingale’s core growth strategy. It provides Nightingale access to the U.S. healthcare market through HealtheNet’s client base, where Nightingale’s technologies can be deployed to provide HealtheNet’s clients with best-of-breed tools.

Similarly, Nightingale’s clients in Canada will benefit from the expanded service and technology currently delivered by HealtheNet to the U.S. market.

Nightingale is planning to amalgamate operations of both HealtheNet and Nightingale in the United States and to focus immediately on leveraging HealtheNet’s client base to expand its offerings to other facilities.

HealtheNet is focused on building a central point of access for disparate healthcare information systems. The system is said to enhance workflow and create efficiencies by reducing data duplication.

“The combination of Nightingale with HealtheNet will create a leading healthcare IT vendor in Canada and the United States, offering one of the most comprehensive suites of physician desktop tools for practice management, clinical data distribution, parsing and clinical transcription systems on the market,” said Sam Chebib (pictured at left), president and CEO of Nightingale.

“Nightingale and HealtheNet share a vision on how to accelerate the adoption of electronic health records and physician technology tools and services across North America,” said Chebib. “We are extremely excited about joining with HealtheNet and believe our combined offerings demonstrate where healthcare solutions are headed to better meet the needs of our customers and prepare them for the future.”

“Nightingale has grown substantially in recent years, and we believe our opportunities for continued growth and expansion will be best realized through the additional technologies and tools that Nightingale can provide,” said Reuben Buckareff, chief executive officer of HealtheNet. “As part of Nightingale, we believe we will be able to capitalize more fully on the rapidly expanding opportunities in the North American healthcare IT industry and establish ourselves as the undisputable leader in ‘physician satisfaction’ through innovative technologies.”

Buckareff said HealtheNet currently provides services to over 18,300 users in five major U.S. markets. “Nightingale will expand our service offerings substantially with these current users,” he added.

HealtheNet is moving toward being an aggregator of patient-centric information by becoming the premier source for efficient medical data collection. Its ASP model incorporates a transaction fee structure, which eliminates the need for large capital expenditures by healthcare providers.

Brookwood Medical Center located in Birmingham, Alabama and part of Tenet Healthcare, has been a leading HealtheNet client and has deployed much of the new technology developed in the last 18 months. “We’ve been very pleased with the operational and productivity enhancements we have realized by implementing HealtheNet at Brookwood, and we look forward to further enhancing our ability to better serve our patients with the addition of the Nightingale suite of products,” said Garry Gause, CEO, Brookwood Medical Center.

HealtheNet currently services clients in Northwestern New York such as the Kaleida Health System in Buffalo and the Erie County Medical Center.

HealtheNet has recently established relationships with a major healthcare system in Pensacola, Florida, which operates facilities along the Gulf Coast from Mobile, Alabama to Panama City, Florida, and St. Vincent’s Hospital in Birmingham, Alabama.

The transaction, which is subject to TSX Venture Exchange and regulatory approvals, and other customary conditions, is expected to close by early 2006.

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