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The lobby of PointClickCare in Mississauga, Ont., on Dec. 19, 2019.Tijana Martin/The Globe and Mail

U.S.-based growth equity firm JMI Equity has sold most of its position in PointClickCare Technologies Inc. as part of a US$600-million-plus recapitalization transaction that values the Mississauga health care records software company at about US$4-billion.

The deal saw JMI’s seventh fund, plus some long-time individual investors in PointClickCare and company employees, sell between US$600-million and US$800-million of stock of privately held PointClickCare, two sources familiar with the company told The Globe and Mail. JMI owned the majority of stock sold in the recapitalization but will remain a shareholder.

The Globe is not identifying the sources because they are not authorized to speak publicly on the matter. PointClickCare did not release financial details about the deal.

The buyers are existing shareholder Dragoneer Investment Group – PointClickCare’s largest institutional investor – and new private equity investor Hellman & Friedman LLC of San Francisco, which is picking up a 10-per-cent stake. H&F partner Sameer Narang is joining PointClickCare’s board, as JMI general partner Matt Emery exits.

The deal comes one month after PointClickCare, one of Canada’s largest private software companies with close to US$400-million in revenue in its past fiscal year, made its largest acquisition to date. It bought Salt Lake City’s Collective Medical for more than US$500-million, one of a recent slew of sizeable cross-border deals involving Canadian technology companies – sometimes as buyers and sometimes as sellers.

It also represented a strategic move by PointClickCare to expand beyond its core business of offering internet-based health care records software to 21,000 nursing homes, retirement facilities and home health agencies. Collective’s software platform tracks 80 million patients at thousands of hospitals, ambulatory practices and long-term postacute care providers, plus other care organization and national health plans across 39 U.S. states. With Collective, PointClickCare can now provide integrated care co-ordination for senior citizens with health issues, positioning it well for “the silver tsunami” of aging baby boomers entering their final years, chief executive Mike Wessinger said last month.

JMI originally invested US$50-million in PointClickCare in 2011 and it’s believed it will end up making about a 15-times return on its total investment over the years, excluding its remaining stake. It is typical for private equity firms to only hold investments for finite periods, before cashing out to realize returns for their investors.

Mr. Emery declined to comment on the financial specifics of the deal but said, “We’re thrilled with the performance driven by the founders and team at PointClickCare over the last 10 years. it’s been one of JMI’s most successful investments. We look forward to continuing to be a shareholder for its next phase of growth.”

PointClickCare had hired UBS Investment Bank and law firm Goodwin Procter LLP to handle the recapitalization, which Mr. Wessinger said met with “really strong demand. There was no shortage of [potential] investors.”

He said H&F emerged as the winning buyer in part because it has done transactions with JMI in the past and JMI “really felt that H&F would be a great partner to us … and bring a lot of value. Rather than trying to get the very last nickel from running a hyper-competitive process they asked us if we would work with H&F. I got to know them, and we thought they would be a great partner just like JMI has been.”

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