InfoCure Corporation Announces Strategic Investment to Expand Dental Practice Management Systems Business
ATLANTA, Nov. 2 /PRNewswire/ -- InfoCure Corporation (Nasdaq: INCX) ("InfoCure") announced today that it has signed a letter of intent with Medical Dynamics, Inc. (Nasdaq: MEDY) ("Medy") to transfer its KComp general dental practice management business to Medy in return for shares of Medy common stock. Medy is the parent company for Computer Age Dentist Inc, a leading supplier of general dental practice management software. In connection with the execution of the letter of intent, InfoCure made a $500,000 loan to Medy to repay certain Medy indebtedness and for working capital. The loan is secured by the assets of Medy and its subsidiaries. InfoCure has also agreed to purchase additional shares of Medy common stock from Medy for $2,000,000 in cash, which the parties expect will consist of $1,500,000 in cash and forgiveness of the loan.
Simultaneous with the completion of these transactions, InfoCure will assign to Medy its agreement to acquire the dental practice management software business known as PracticeWorks from Zila, Inc. (Nasdaq: ZILA). As a result, Medy will have approximately 5,000 practices representing 8,000 dentists with combined pro forma revenue of approximately $13 million dollars. After these transactions are completed, InfoCure will own approximately sixty percent (60%) of the total outstanding shares of Medy, on a fully diluted basis. The parties expect the transactions to close by year-end or in the first quarter of 2000. The transactions are subject to a number of conditions to closing. There can be no assurance that the parties will be able to satisfy all of these conditions or that the closing will ultimately occur in accordance with the contemplated terms.
Frederick Fine, InfoCure's President and Chief Executive Officer stated: "Our proposed investment and ownership in Medy reinforces our strategy of establishing leadership in key healthcare technology markets. By quickly capturing the doctors office "desktops" that use practice management software and systems to run their practice, we will be in a unique position to bring the individual doctor the benefits afforded by electronic commerce and Internet connectivity. We strongly believe that the practice management system is the portal that will allow doctors to take advantage of these new opportunities.
In addition, we believe our business and technical understanding of the small practice market for information technology and related services will be a key element in our relationship with Medy and Medy's opportunity to capture the largest number of desktops in the dental information technology marketplace.
From a financial point of view, the structure of these transactions is very efficient and allows us to capture a substantial number of desktops and a significant amount of pro forma revenue without a large capital outlay."
Van Horsley, Medy's President and Chief Executive Officer stated: "We are delighted to be able to align ourselves with a company such as InfoCure. Their successful experience with making and integrating acquisitions will prove to be a very valuable tool for Medical Dynamics' continued strategy of consolidating dental practice management software companies." |
