SOURCE: ABS Capital Partners

May 10, 2006 10:24 ET

Source Medical Solutions, Inc. Secures $16 Million

ABS Capital Partners Attracted to Company's Growth and Superior Health Care Technology Solutions

BIRMINGHAM, AL -- (MARKET WIRE) -- May 10, 2006 -- Source Medical Solutions, Inc., a leading provider of outpatient information management solutions, today announced that it has secured $16 million of equity financing. The financing was led by ABS Capital Partners, a leading private equity firm focused on investing in established and profitable growth companies, with participation from existing individual investors. The investment will be used to provide capital for expansion purposes and retire existing debt obligations. John Stobo, a General Partner at ABS Capital Partners, and Mark Anderson, a Principal at ABS Capital Partners, will join Source Medical's Board of Directors.

"Source Medical's financial results and strength have improved over the past year, and we continue to make progress," said Scott Stone, Executive Vice President and Chief Financial Officer of Source Medical. "ABS Capital has a proven track record in the healthcare IT sector, backing many of the industry's leaders over the past decade. We believe that this investment, coupled with their experience in high growth companies, will be valuable to us as we continue to grow Source Medical."

Source Medical's solutions streamline and integrate key administrative, clinical and financial data to enhance the patient care and practice management processes of ambulatory surgery centers (ASCs), surgery hospitals, outpatient rehabilitation centers, diagnostic imaging centers and physician offices. This end-to-end approach is proven to reduce health care costs, improve information accuracy and increase clinical efficiency. The ambulatory and alternate site market is being fueled by a larger footprint of service availability, a generally favorable reimbursement environment and a growing population of high utilization patients. Today, an estimated 35% of outpatient surgeries are performed in ASCs as compared to approximately 6% in 1980, according to SMG Marketing and JPMorgan. As both the volumes and the scope of outpatient services is rapidly expanding, ASCs and other alternate site providers will need to increase operational efficiency and grow daily procedure volume, in turn, creating significant pressures to automate the health care delivery process and increasing the demand for robust information systems. This heightened demand is also driven by complex federal and payor rules and by the need to contend with continually evolving health care regulations, such as the Health Insurance Portability and Accountability Act (HIPAA).

Source Medical's software is designed to support the core operational requirements of ASCs and rehabilitative therapy centers. It also offers the free standing diagnostic imaging center market an application service provider (ASP)-based Radiology Information System capable of interfacing with Picture Archiving and Communication Systems. The Company has an installed base of over 3,300 facilities and combined, its products are used by more than 20,000 health care professionals to document over 80,000 patient visits per day. Today, more than 3,300 satisfied customers rely on Source Medical for innovative applications, in-depth industry expertise and unsurpassed customer service. The Company's clients include some of the largest providers of outpatient care services, such as Hospital Corporation of America (HCA), Tenet Healthcare Corporation, HealthSouth Corporation, United Surgical Partners and Symbion Healthcare, a former ABS Capital portfolio company.

"Source Medical is a great example of the kind of growth we look for as investors," said Mark Anderson, principal at ABS Capital Partners. "The company is selling a leading solution in a fast-growing market, has a management team that we have known for some time and has performed well. As more and more procedures are moved to alternate sites, those providers will increasingly need solutions to help them manage workflow and navigate a complex regulatory and reimbursement environment. We look forward to partnering with Source Medical to continue to capitalize on the growing demand for their offerings."

About Source Medical Solutions

Source Medical provides outpatient information solutions and services for ambulatory surgery centers, rehabilitation clinics and diagnostic imaging centers nationwide. With an established track record and more than 3,300 satisfied customers, Source Medical is the trusted source for innovative applications, in-depth industry expertise and unsurpassed customer service. The company's unique, end-to-end systems improve operational efficiency and cash flow while enabling health care facilities to deliver a higher standard of patient care.

About ABS Capital Partners

ABS Capital Partners is a private equity firm that was founded in 1990 to invest in mid- to later-stage growth companies in order to create significant, market-leading companies. The firm's investment strategy focuses on companies in the health care, technology, business services and media & communications sectors. ABS partners with strong management teams to help build businesses with substantial revenues, near-term profitability and solid customer bases. The firm has created long-term value for management and investors. ABS leverages over 100 years of combined investing and operating experience among its partners and provides a range of investment structures, including expansion financings, management buyouts and recapitalizations. With an extensive history and knowledge of equity and mergers & acquisitions markets, ABS Capital provides strategic guidance and helps companies to capitalize on their business opportunities. ABS has $1.5 billion under management and nine investing partners within offices in Baltimore, San Francisco and Boston. Over the past fifteen years, ABS has invested in over 70 portfolio companies, including Omnicell, Inc., Symbion Healthcare, Inc., Transition Systems, Inc. (now Eclipsys Corp.), U.S. Pathology Labs, Inc. (now Laboratory Corp. of America Holdings), AMISYS Managed Care Systems Corporation (now McKesson Corporation), NeuStar, Inc., Liquidity Services, Inc. and DoubleClick, Inc.

Contact Information

  • Contact:
    Stephanie Manuel
    ABS Capital Partners
    (410) 246-5609
    Email Contact

    Scott Stone
    Source Medical Solutions, Inc.
    (205) 969-4690
    Email Contact