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Chartwell Bought For $90 Million

Merging online and off line health care companies, e-MedSoft.com will buy Chartwell Diversified Services in a deal worth approximately $90 million.

e-MedSoft, of Jacksonville Beach, Fla., is an application service provider. Privately held Chartwell, of Lowell, Mass., offers administrative and operations management.

The combined company, to be called Med Diversified, will boast 9,000 employees and annual revenues of more than $250 million. While neither company released specifics, job cuts are expected as a result of the merger. The deal must first pass muster with regulators.

"Health-care-related entities will rely heavily on its ability to systematically and efficiently gather and rationalize data." Chartwell CEO Frank Magliochetti said. "The company that can assimilate this information in a transactional format will leap frog the industry. We believe e-Medsoft has these capabilities."

Unlike some Internet companies, e-MedSoft uses its own technology rather than repackage technology from different vendors, said Magliochetti, who will serve as vice chairman and president of the new company.

John F.Andrews, e-MedSoft's chairman and CEO, said the merger "is a natural outgrowth of two companies that have worked closely together to use technology in order to experience the actual economies of scale that make health care an inherently profitable enterprise." Andrews will assume the same role with Med Diversified.

Chartwell shareholders receive either $90 million cash at the close, or 50 million shares of e-MedSoft stock and a $4.00 warrant to purchase another 4 million shares per year for 5 years. Chartwell shareholders would be unable to sell more than a combined total of 20,000 shares per day into market.

The purchase agreement was announced after markets closed Thursday. Shares of MED were set to open at 0.74 Friday. In the last year, the issue has ranged from 0.38 to 19.310.



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