Trintech Group Announces Acquisition of the Health Care Business and Assets of Concuity, Inc.
Dallas, Texas/Dublin, Ireland – December 5, 2006 – Trintech Group Plc (NASDAQ: TTPA), a leading provider of financial software and technology services, today announced the acquisition of substantially all of the assets and assumption of certain liabilities of Concuity, Inc., a private company specializing in technology solutions for the health care industry, for an expected total cash consideration of up to $8.25 million.
The consideration comprises initial cash consideration paid on closing of $5.5 million and a performance-based earn out payable over two years, which is estimated at between $2.5 million and $3.5 million, $2.0 million of which is guaranteed.
In addition to the expected $8.25 million consideration being paid to acquire the business and assets of Concuity, Trintech expects to fund operational losses of the business of up to approximately $1.5 million from the date of acquisition through January 31, 2008.
Concuity, Inc, is a Chicago, Illinois based private company which provides leading-edge technology solutions to optimize contract profitability for the health care industry. Concuity’s primary value proposition is providing health care providers with software applications to allow them to recover revenue that has not been paid by payers due to the complexity of the health care billing process in the United States.
Concuity’s solutions provide hospitals, integrated health systems and outpatient clinics the visibility and control needed to analyze and negotiate contracts with payers, ensure accurate compliance with contractual obligations, and resolve revenue loss tied to denials and underpayments of health care claims through reconciling the remittance (Explanation of Benefit) to the claim prepared on the basis of the payer contract.
Concuity delivers its web-based software suite, ClearContracts, through an application service provider (ASP) model and complements this technology with a revenue recovery services offering.
Concuity has 47 employees, the majority of whom will transfer with the acquired business, which currently service 18 clients, including Providence Health System, Sutter Health and Cape Cod Healthcare.
Trintech Chairman and CEO Cyril McGuire said, “The acquisition of the Concuity business continues Trintech’s expansion into the fast growing health care market. Our primary focus will be to exploit the significant revenue cycle management opportunities for health care provider clients in the contract to claim to payment market sector. This synergistic acquisition demonstrates our commitment and determination to enter new growth markets which can best leverage our core competencies in reconciliation, transaction risk management and compliance.”
Paul Byrne, Trintech President added, “Trintech proposes to invest in the business to expand its position in this growing market which, whilst diluting earnings in the short term, is expected to deliver a robust profitable ASP business in the medium term. Concuity has built an impressive business with a market leading product, strong customers, experienced management and a proven ASP business model with over 75% of its revenue recurring annually.”
Trintech expects the acquired business to generate revenue of approximately $800,000 for the remaining two months of Trintech’s fourth quarter and incur an operational loss of approximately $400,000 for the same period. For the fiscal year commencing February 1, 2007, Trintech expects the acquired business to generate revenue in the $5.5 million to $6.0 million range and incur a net operating loss of approximately $1.1 million. Trintech expects the business to be accretive to earnings beginning in the fiscal year commencing February 1, 2008, excluding the impact of any amortization of the purchase price.
This acquisition reinforces Trintech’s commitment to build a strong growth business focused on its core competencies of providing financial software solutions and technology services specializing in transaction verification, reconciliation management, process automation, and compliance for financial departments seeking greater insight into critical transaction processes.
About Trintech Group
Trintech Group Plc (NASDAQ: TTPA) is a leading global provider of financial software and technology services specializing in transaction verification, reconciliation management, process automation and compliance for commercial, financial and healthcare markets. For over 20 years, Trintech has been providing comprehensive, industry-leading solutions to financial departments seeking greater insight into critical transaction processes. Trintech delivers a configurable, highly scalable platform that incorporates a company’s unique business logic, enabling managers to obtain greater visibility and more efficiently manage business risk throughout the transaction lifecycle. Trintech’s transaction management solutions include: ReconNET for high volume transaction reconciliation; AssureNET GL for general ledger reconciliation and certification; Treasure eNET for cash management; Bank Fee Analysis; and the DataFlow Transaction Network for data collection and delivery. Over 400 leading companies across a variety of industries rely on Trintech products and services. Clients include: North Fork Bank, 7-Eleven, Kroger, Regal Entertainment, Accor, UPMC, Farmer’s Insurance Group, YUM! Brands Restaurants, Rohm and Haas, Verizon Wireless, and Ameren.
Trintech’s principal business office is in Dallas, Texas, with international offices in Ireland, the United Kingdom and the Netherlands. Trintech can be reached at 15851 Dallas Parkway, Suite 900, Addison, TX 75001 (Tel 1.972.701.9802). Trintech’s corporate office can be contacted at Trintech Technologies, Block C, Central Park, Leopardstown, Dublin 18, Ireland (Tel 353.1.293.9840). For more information, please visit www.trintech.com.
Forward Looking Statement
This news release contains “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any “forward looking statements” in this press release are subject to certain risks and uncertainties that could cause actual results to differ materially from those stated. “Forward looking statements” in this press release include statements, among others, relating to the estimated dollar amount of the performance based earn out, the expectation that the acquisition will dilute earnings in the short term and deliver a profitable ASP business in the medium term, the acquired business’ expected financial performance for the remaining two months of Trintech’s fourth quarter and for the fiscal year commencing February 1, 2007, the expectation that the transaction will be accretive to earnings for the fiscal year commencing February 1, 2008 excluding the impact of any amortization of the purchase price, and the impact of the acquisition of the assets of Concuity, Inc. on the execution of Trintech’s strategic plan, including the expansion of Trintech’s position in the growing health care market. Factors that could cause or contribute to such differences include Trintech’s ability to accurately predict future sales, its ability to successfully integrate the assets of Concuity, Inc, its ability to accurately predict and meet customer needs and to successfully position itself in the market, Trintech’s ability to ensure the performance of its products and services, and its ability to improve the performance of its organization and execute on its strategic plan, its ability to ensure that Concuity’s customers continue to avail of the service, its ability to sign new customers for the ClearContracts product suite leading to profitability, its ability to ensure the performance of the ASP infrastructure meets customers expectations and its ability to retain key employees. Actual performance may also be affected by other factors more fully discussed in Trintech’s Form 20-F for the fiscal year ended January 31, 2006 and Form 6-K for the quarter ended July 31, 2006, filed with the US Securities and Exchange Commission (www.sec.gov). Lastly, Trintech assumes no obligation to update these forward-looking statements.
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