HCPro Management Leads Buyout of Company

Press Releases, December 28, 2002

December 30, 2002-Marblehead, Mass.-The Riverside Company, a New York- and Cleveland-based private equity firm, announced the closing of a management-led buyout of HCPro Corp. that positions HCPro for continued growth as the leading provider of information on compliance and regulation to the healthcare industry.

"This transaction will allow us to expand our industry leadership position through internally developed products and product lines in our current and new markets. We will also be very active in acquiring new assets and companies," said Bruce Guzowski, HCPro's chief executive officer. He added that the new management team and employees "are honored to have the opportunity to continue HCPro's mission of helping the healthcare industry to become a safer and more efficient industry." HCPro's revenues in 2002 will be approximately $27 million. HCPro has 160 employees and is based in Marblehead, MA.

HCPro provides its need-to-know information products to the healthcare industry in a variety of formats and media, including newsletters, books, videos, audio conferences, e-learning educational courses, seminars and consulting and training.

"On behalf of all founding shareholders, we are very pleased to turn the ownership of HCPro over to the HCPro management team and Riverside," said Jim Flanagan, a founder of HCPro and its former chairman. "We have great confidence in their ability to continue HCPro's tradition of delivering quality and timely products and services that meet the needs of healthcare professionals." Flanagan and his wife, medical records expert Jennifer Cofer, were controlling shareholders of HCPro Corp. Flanagan will serve on the new company's board of directors.

Riverside, the majority investor, will count HCPro as a new platform company and plans to support the company's continued growth through organic means as well as through potential add-on acquisitions. HCPro is Riverside's third investment in the healthcare industry. The HCPro purchase marks Riverside's 13th acquisition of 2002, and its 65th since the firm's inception in 1988. Riverside officials say they were attracted to HCPro as an investment because of the company's position as an industry leader, HCPro's high-quality management team, and the opportunity for growth in this industry.

Also participating in the transaction are Citizens Bank as the senior lender and BIA Digital Partners LP, which provided the subordinated debt. Bariston Partners served as the merchant banker for the transaction. Other members of the HCPro management team participating in the new company, beside Guzowski, include Richard Sheff, MD, Suzanne Perney, Rob Stuart and Bernie Rotundo. Terms of the transaction were not disclosed.

The Company was founded in Marblehead, MA, as a specialty publisher in 1986 by Jennifer Cofer, a nationally recognized authority in healthcare information management. HCPro currently offers 34 weekly and monthly regulatory newsletters, 162 book titles, 119 videos, more than 60 audio conferences annually, 75 e-learning education products, and 19 seminars. It also operates 24 Web sites focused on healthcare. In addition, HCPro offers consulting services through 10 full-time and 50 per diem consultants. The Company has become the most extensive provider of need-to-know information on regulatory compliance in the healthcare industry. The new corporate name of the company is changing to HCPro Inc. from HCPro Corp.

The Riverside Company
The Riverside Company, with offices in New York, Cleveland, Dallas, and San Francisco, is one of the leading private equity firms investing in premier companies at the smaller end of the middle market. The firm has more than half a billion dollars of capital under management and has earned its investors realized gains of more than five times their original cash investments. In addition to four pre-1995 acquisitions, Riverside has brought to market The Riverside Capital Appreciation Funds of 1995, 1998, and 2000, attracting investors from pension funds, endowments, funds-of-funds, insurance companies, and banks. Since its inception in 1988, Riverside has invested in 65 acquisitions-32 platform companies and 33 add-on acquisitions-across a variety of industries through its three funds and other investment vehicles. More information on The Riverside Company can be found at www.riversidecompany.com.