Exclusive-Netsmart's owners explore a sale valuing it at $5 billion -sources

By Anirban Sen, Milana Vinn and David Carnevali

NEW YORK (Reuters) - The private equity owners of Netsmart Technologies are exploring a sale of the U.S. healthcare software firm that they hope will value it at more than $5 billion, including debt, according to people familiar with the matter.

The Overland Park, Kansas-based company, which is owned by GI Partners and TA Associates, is working with investment banks Goldman Sachs Group and William Blair to launch a sale process in the coming weeks, the sources said.

Netsmart expects to generate earnings before interest, taxes, depreciation and amortization of about $250 million this year, the sources added.

Potential buyers could include other private equity firms, according to the sources, who cautioned that no deal is certain and who requested anonymity because the matter is confidential.

GI Partners declined to comment. TA Associates, Netsmart, Goldman Sachs and William Blair did not immediately respond to requests for comment.

Founded in 1968, Netsmart is a provider of electronic health records services, healthcare information exchanges, and software that is used for telehealth services.

The company's offerings are used primarily by community-based healthcare centers, non-profit healthcare organizations and hospice care centers across the United States. Netsmart currently has a user base of more than 754,000 at care centers it counts as clients.

Netsmart serves communities that specialize in areas such as behavioral health, addiction treatment, intellectual and developmental disabilities, child and family services, and home health and hospice.

In 2016, GI Partners formed a joint venture with Allscripts Healthcare Solutions to acquire Netsmart for about $950 million from Genstar Capital. As part of the deal, Allscripts merged its homecare software business with Netsmart.

In 2018, GI Partners and TA Associates teamed up to buy out Allscripts Healthcare's stake in Netsmart.

(Reporting by Anirban Sen, Milana Vinn and David Carnevali in New York; Editing by Leslie Adler)