WebMD to Acquire Dakota Imaging

Insurance Networking News, April 6, 2004

WebMD Corp., Elmwood, N.J., has entered into a definitive agreement to acquire Dakota Imaging, Inc., a privately held provider of automated healthcare claims processing technology and business process outsourcing (BPO) services.

Dakota's scalable software and BPO services provide automation for mailroom, document processing, scanning, data capture, data scrubbing, automated workflow and online secure document management. Dakota's solutions can reduce costs associated with manual processing of healthcare documents and increase auto-adjudication and auto-payment of medical claims through advanced data scrubbing.

Roger C. Holstein, CEO of WebMD, said, "This combination is expected to contribute significantly to WebMD Envoy's growth in the future, as it represents an important step in our transformation into a single source provider of comprehensive claims communication services. Dakota brings a talented management team, a strong 12-year track record of serving healthcare payers and proven technology for increasing claim auto-adjudication rates via advanced data scrubbing."

WebMD has agreed to pay $40 million in cash at closing and has agreed to pay up to an additional $25 million in cash over a three year period beginning in April 2005 if certain milestones are achieved. The transaction is subject to Dakota shareholder approval and other customary closing conditions and is expected to be complete this month.

For the twelve months ended December 31, 2003, Dakota recorded revenues of approximately $17.5 million, and earnings before interest, taxes, depreciation and amortization of approximately $2.8 million. Dakota's customer base currently includes 24 of the 41 BlueCross and/or BlueShield plans in the U.S. as well as Medicare claims processors in 21 states.

Source: WebMD Corp.

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