Fifth Third Provides Financing for Streamline Health Acquisition
Streamline Health Solutions, Inc., a provider of enterprise content management and business analytics solutions for healthcare organizations, announced the acquisition of New York City-based Meta Health Technology, Inc., a provider of health information management solutions for hospitals, clinics, physician group practices and long-term care facilities across the U.S. and Canada.
“The acquisition of Meta, with its outstanding reputation in the health information management (HIM) space, represents the continuation of our on-going growth strategy and-as with the Interpoint Partners acquisition last year-is reflective of our organization becoming more market-facing where our solutions development is led by the needs and requirements of our clients and the marketplace in general,” said Robert E. Watson, President and Chief Executive Officer of Streamline Health Solutions.
Streamline Health acquired the outstanding capital stock of Meta for approximately $15 million, comprised of $13.4 million in cash and $1.6 million in Streamline Health stock at a price equal to the average of the previous 10 days closing price as reported by NASDAQ. In conjunction with this acquisition, Streamline Health has restructured its financing agreement with Fifth Third Bank whereby the bank will provide the company with a new $5 million revolving line of credit, a $5 million senior term loan, and a $9 million subordinated term loan, a portion of which was used to refinance the previously outstanding $4.1 million subordinated term loan. The new financing package brings Streamline Health’s average cost of capital down to approximately 8.5%. This financing plus the company’s on-hand cash funded the Meta Health Technology acquisition.
In a separate transaction, the company completed a $12 million equity investment led by Great Point Partners (GPP), and Noro-Moseley Partners. As part of this investment, the company issued no dividend convertible preferred stock, which has the right to convert to common stock on a one for one basis at $3 per share, and warrants to purchase common stock. In addition, the company issued convertible notes, which, upon shareholder approval, will convert into the same series of convertible preferred stock noted earlier. As part of this transaction, the membership of the Board of Directors of the company was increased from 7 to 9.
Streamline Health was represented by Coker Capital Advisors, Atlanta, GA in its acquisition of Meta Health Technology, Inc. First Analysis Securities Corporation, Chicago, IL acted as the exclusive placement agent for the company in its financing with GPP and NMP.