San Fran equity firm snaps up QuadraMed for $129M

QuadraMed, a provider of health IT and services, has entered into a definitive merger agreement to be acquired by Francisco Partners, a technology-focused private equity firm.

Under the terms of the agreement, Francisco Partners of San Francisco has agreed to acquire all of the outstanding shares of QuadraMed’s common stock for $8.50 per share in cash and all of the outstanding shares of QuadraMed’s series A cumulative mandatory convertible preferred stock for $13.71 per share in cash, totaling approximately $129 million.

Duncan James, QuadraMed’s president and CEO, said the acquisition will help with its initiatives, which include “helping our clients attain ARRA stimulus funds” with the deployment of its EHR solution (QCPR); assisting healthcare facilities with their transition from ICD-9 to ICD-10 code sets; and its on-going investment in its Care Based Revenue Cycle solutions.

QuadraMed said its directors, executive officers and affiliates, who control approximately 8.4 percent in the aggregate of the outstanding common stock, have agreed to vote their shares in favor of the transaction, which is subject to customary closing conditions, including the approval of its common stockholders and regulatory approval.

According to the companies, there is no financing condition to the transaction, but Wells Fargo Foothill, part of Wells Fargo, and Silicon Valley Bank have committed to provide debt financing for the transaction. QuadraMed also anticipates a stockholder meeting in the first quarter of 2010, with closing to follow shortly thereafter.

QuadraMed said it plans to maintain its Reston, Va., headquarters and operations at its various offices throughout the U.S.