Spectrum Equity Investors and Great Hill Partners lead $232 Million Investment in Passport Health; Primus Capital Funds to Roll Equity, Invest Additional Capital

Explore this investment 07.31.08

Transaction Provides Liquidity to Long-Term Venture and Angel Investors, Funding for Passport’s Continued Growth

FRANKLIN, Tenn. — July 31, 2008 — Two leading private equity firms have made a significant growth investment in Passport Health Communications, Inc., a Franklin, Tenn.-based health care technology company. Passport offers health care providers and payers a comprehensive suite of solutions to manage the revenue cycle, enhancing the amount and timeliness of reimbursement and increasing administrative and financial productivity.

Following the recapitalization, Spectrum Equity Investors and Great Hill Partners will own a majority interest in Passport. Primus Capital Funds, which led a recapitalization of the company in 2006, has rolled a majority of its existing stake and has contributed additional equity alongside Spectrum Equity and Great Hill. The senior management team, led by Chairman and CEO Jim Lackey, will continue to retain a significant equity position in the company.

“Passport is pleased to complete this recapitalization to help launch our next phase of growth,” said Lackey. “We are fortunate to be able to work with this group of quality investors. Their collective experience and resources will allow us to carry out our long-term business plan by making continued investments in our products and services and by supporting acquisition opportunities.”

Mark Taber, a Partner at Great Hill, commented, “Passport represents an exciting opportunity to capitalize on the favorable trends in the revenue cycle management sector. We are excited to partner with management and to provide the additional capital and resources to help Passport expand its product line and to support further strategic opportunities.”

The transaction provided liquidity to long-term angel and venture capital investors, as well as provided access to additional capital for investment in new products and future acquisitions. Existing lenders Goldman Sachs Specialty Lending Group and Ares Capital Corporation also participated in the equity financing. The debt financing provided to Passport in May from Goldman, Ares and Wells Fargo Foothill remains in place.

“Passport is a highly profitable, rapidly growing provider of health care information technology services,” said Jim Quagliaroli, Principal at Spectrum Equity Investors. “Given our focus on information service businesses and specific investment experience in data communications and online services, Passport is a terrific fit for us.”

In May Passport completed the acquisition of Nebo Systems, Inc., an Oakbrook Terrace, Ill.-based provider of claims management technology and insurance eligibility verification services. Nebo represented the company’s fourth acquisition in the revenue cycle management sector.

As part of the recapitalization transaction, William Collatos and Jim Quagliaroli of Spectrum Equity and Matthew Vettel and Mark Taber of Great Hill will join Passport’s board of directors. Phillip Molner of Primus and Lackey will remain directors of the company.

Brentwood Capital Advisors acted as Passport’s exclusive financial advisor in the transaction. Latham & Watkins served as legal advisor for Spectrum Equity, Goodwin Procter served as legal counsel for Great Hill Partners, and Waller Lansden served as legal counsel for Passport.

About Passport Health

Passport Health Communications, Inc., Nebo Systems, Inc. and The Cosand Group, a family of companies owned by Passport Holding Corporation, provide health care technology to more than 5,300 hospitals, physician practices and other health care providers in all 50 states. The companies deliver a range of administrative, clinical and financial tools via real-time, batch and integrated technology to improve the efficiency and accuracy of the revenue cycle process. For more information, visit www.passporthealth.com.

About Primus Capital Funds

Founded in 1983, Primus Capital Funds is a private equity firm that invests in high-growth companies within the healthcare, business services, and for-profit education industry sectors. Transaction types include management-led buyouts, recapitalizations, and primary investments of growth capital. For more information, please visitwww.primuscapital.com.

About Spectrum Equity Investors

Founded in 1994, Spectrum Equity Investors is a leading private equity firm specializing in investments in profitable, growing service businesses throughout North America and Europe. With offices in Boston and Menlo Park, Spectrum currently manages over $4.0 billion in capital. For more information, please visitwww.spectrumequity.com.

About Brentwood Capital Advisors

Brentwood Capital Advisors LLC, founded in 1999, is a privately held investment bank headquartered in Nashville, Tennessee, providing mergers and acquisition and capital raising advisory services to middle market healthcare and business services companies. More information about Brentwood Capital Advisors can be found atwww.brentwoodcapital.com.

About Great Hill Partners

GHP is a private equity firm that manages over $2.5 billion in capital to finance the expansion, recapitalization or acquisition of growth companies in a wide range of sectors within the business and consumer services, media, communications and software industries. GHP targets investments of $50 million to $150 million. For more information, please visit www.greathillpartners.com.