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UCG Sells Fastest-Growing Product Line But Stays in Game

NEPA Hotline
May 15, 2006

Why would UCG, a company that prides itself on building great products for the long term, sell CodeCorrect, one of its fastest growing and most promising health-care information services?

Even though it is the biggest divestiture in UCG’s 27-year history and a portion of the proceeds was immediately reinvested to acquire another large and fast-growing information company — LoanToolbox, a comprehensive information service for loan originators — there was a critical twist to the CodeCorrect deal.

"Selling a unit with enormous growth potential (for the past three years Inc. Magazine named CodeCorrect as one of America’s fastest growing companies) wasn’t easy, but we were faced with one of those rare opportunities where we could have our cake and eat it too," said Ed Peskowitz, one of UCG’s founding partners.

Peskowitz explained: CodeCorrect develops and provides software solutions hospitals use to code and file reimbursement claims with Medicare and private insurance companies. Its focus is and will be on the hospital side of the business. As a result, CodeCorrect has a relatively small presence in the physician market, the health-care niche UCG knows best.

In the process of selling CodeCorrect to Accuro Healthcare Solutions, UCG negotiated an exclusive licensing agreement to market, sell and enhance the CodeCorrect database of information to medical group practices.

It means UCG will continue to play, grow and thrive in the physician market, Peskowitz said. "Our coding product for medical group practices, which will continue to be powered by CodeCorrect, is the most comprehensive database of public and proprietary content available anywhere. The licensing agreement means we’ll be able to blow out our coding products for physicians and continue to increase market share. 

"This was a great deal for us and a win/win for all involved," Peskowitz said. While terms of the deal were not disclosed, Accuro was backed by $100 million from private equity firm Welsh, Carson, according to published reports.

Ed Peskowitz, UCG, 11300 Rockville Pike, Suite 1100, Rockville, MD 20852-3030 (301)287-2700 Fax: (301)816-8945 E-mail: pesko@ucg.com  Web: http://www.ucg.com/  

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