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Private Equity funds Acquisition in Healthcare ARM Industry

Kaulkin Ginsberg says opportunities in healthcare receivables management drove the transaction

BETHESDA, MD, March 24 2006 – Kaulkin Ginsberg Company today announced the merger of two accounts receivable management (ARM) firms specializing in servicing healthcare providers. St. Louis-based The Outsource Group (TOG), a portfolio company of ClearLight Partners, LLC of Newport Beach, California, acquired Midwest Collection Services, Inc. (MCS) of Florissant, Missouri. The combined companies will have approximately 130 employees in 3 offices. Kaulkin Ginsberg Company advised MCS throughout this transaction.

This transaction indicates the continued investment in ARM companies by both private equity and strategic investors. “We’ve seen a number of new and add-on investments in the ARM industry recently by substantial investors, including GTCR, American Capital Strategies, and Sallie Mae,” said Brian Greenberg, Managing Director of Kaulkin Ginsberg. “We expect this interest to continue, especially in niche markets that have growth potential, like outsourced healthcare receivables. This particular transaction should open doors for the merged company to larger healthcare providers, expanding its opportunities for growth.”

The newly-formed company will be better equipped to capitalize on this growing market. “The merger expands the support levels the clients of both companies can expect in the future,” said MCS President, Michael P. Reilly, who will remain with the new company as Executive Vice President for business development and client services.

Michael DiMarco, CEO of The Outsource Group, noted how improved service levels will benefit the company’s clients. “The merger focuses 130 employees on the task of accelerating cash flow for healthcare providers. Not only does this assist physician practices and hospitals in the recovery of funds due them, but it enables them to provide improved healthcare services to their patients,” he said.

Greenberg added, "Healthcare collections, like many sectors of the growing ARM market, is full of opportunities for companies like these to grow both organically and through acquisition. We're pleased to complete this transaction for Mike Reilly and his professional team.”

About Kaulkin Ginsberg Company
Kaulkin Ginsberg Company is the leading advisor to the Accounts Receivable Management industry. Since 1991, the firm has advised on more than 100 ARM transactions with aggregate deal value in excess of $2.5 billion. The Strategic Advisory Group provides merger, acquisition, and valuation advice; operational consulting; and executive search services. The Research Group produces industry-specific publications and custom research products. The Kaulkin Ginsberg family of companies also includes Kaulkin Media, publisher of the most popular sources of industry information such as CollectionIndustry.com(TM) and Credit & Collection Daily(TM). Read more about Kaulkin Ginsberg at www.kaulkin.com.

About Midwest Collection Services, Inc. (MCS)
Founded in 1982, MCS is a leading provider of outsourced receivables management services. The company primarily specializes in serving healthcare clients.

About The Outsource Group:
U.S. Collections, Inc. (d/b/a The Outsource Group) is a leading provider of first-party and third-party receivables management services to the healthcare industry. The company has more than 25 years of experience working with hospitals and physicians' groups on accounts receivable management and bad debt collections. Licensed to operate nationwide, the company is headquartered in St. Louis, MO and has a state-of-the-art call center in Columbia, MO. The company's core competencies include early-out, insurance follow-up, and bad debt collections. ClearLight Partners partnered with a seasoned industry executive to recapitalize and grow the company organically and through acquisitions.

About Clearlight Partners, LLC.
ClearLight Partners is one of the leading middle-market private equity firms in Southern California. With $300 million in capital and extensive operating and financial experience, they invest in and contribute to the expansion of established and profitable middle-market businesses. Contact: Brian Greenberg, Managing Director For Kaulkin Ginsberg (www.kaulkin.com) 301-907-0840 ext. 108