CPSI Announces the Acquisition of Medical Encoder Solutions Provider, TruCode LLC

CPSI (NASDAQ: CPSI), a community healthcare solutions company, today announced that it has acquired TruCode LLC (“TruCode”). TruCode is a leading provider of software solutions that enable health providers, consultants, and payors to code more accurately and efficiently and help improve revenue cycle performance. The acquisition was consummated pursuant to a definitive purchase agreement signed on May 12, 2021 and was funded by a combination of cash on hand and additional borrowing capacity under CPSI’s revolving credit facility.

Based in Alpharetta, Georgia, TruCode provides configurable, knowledge-based software that gives coders, CDI specialists and auditors the flexibility to code according to their knowledge, preferences and experience. The cloud-based medical coding solution will be bundled with the TruBridge solutions and services to enhance revenue cycle performance for healthcare organizations of all sizes.

Boyd Douglas, president and chief executive officer of CPSI, stated, “Today’s acquisition of TruCode is a perfect example of the disciplined approach to M&A we have signaled as part of our multi-pronged capital allocation strategy. TruCode’s solutions are a great product fit and complement our existing suite of TruBridge services and solutions, which help eliminate the friction of inefficiency from the hospital revenue cycle. In addition to the cross-sales opportunities within our acute and post-acute customer base, we will also target the white space within the TruBridge and TruCode base to drive additional value for these customers. Greater than 30% of TruCode’s revenue is driven by its channel partner program which targets larger hospital and health system customers, representing scalability and real competitive value in that market.”

“From a financial standpoint, TruCode’s 99% recurring revenue model, customer retention rates in excess of 95%, and Adjusted EBITDA margins in excess of 45% support our strategy of growing a more diverse recurring revenue base and driving margin expansion,” stated Matt Chambless, chief financial officer of CPSI. “The impressive margins that TruCode brings to the CPSI family of companies is expected to expand our consolidated EBITDA margins by roughly 130 bps, with the potential for another $1.0 million of adjusted EBITDA from capitalization of software development costs.”