CTG To Acquire Elumen Solutions, Inc., a Leading Information Technology Consulting Firm for Health Care Industry.

BUFFALO, N.Y.--(BW HealthWire)--Feb. 1, 1999--CTG (Computer Task Group (NYSE: TSK)), a $455 million international information technology (IT) services company, today announced the signing of a definitive agreement to acquire the stock of Elumen Solutions, Inc. (Elumen) of Cincinnati, Ohio, the largest privately held consulting firm specializing in information technology services for health care organizations. Of the aggregate transaction value of $89 million, for all the outstanding stock and options of Elumen, $86 million will be paid in cash or through the assumption of debt and the remainder of the consideration will be satisfied through the issuance of approximately 128,000 shares of CTG common stock. The acquisition will be accounted for as a purchase and is expected to be completed during CTG's first quarter, which ends on March 26, 1999. CTG expects the acquisition will be neutral to slightly accretive to earnings in 1999.

Based in Cincinnati, Ohio, Elumen is a leading health care information technology consulting firm generating revenues of approximately $36 million in 1998 and employing over 220 health care focused IT consultants. The combination of Elumen with CTG's health care practice accounts for revenues of approximately $44 million for 1998, serves approximately 250 health care clients and comprises over 300 health care information technology consultants.

The combined group will be called CTG HealthCare Solutions and be led by Christopher J. Bergmann, president and chief executive officer of Elumen. Upon completion of the transaction, Bergmann will become a vice president of CTG reporting to chairman and chief executive officer Gale S. Fitzgerald.

In commenting on the acquisition, Gale S. Fitzgerald said "This acquisition provides tremendous depth and breadth for our clients, our colleagues and CTG shareholders. It provides a superb opportunity for CTG to immediately attain a leadership position in IT consulting for health care organizations which is one of the fastest growing sectors of IT consulting. Combining the caliber and reputation of Elumen and CTG will enable us to grow our health care consulting business faster and better serve our clients."

Fitzgerald noted that the market for health care IT services was estimated at $3.4 billion annually in 1997. She added that several factors are driving current growth rates of over 20% in the health care IT sector including the creation of large integrated health care delivery systems, the consolidation of health care providers and systems, the impact of managed care and the need to invest in information technology to improve care and achieve cost and operating efficiencies.

Fitzgerald continued, "We are delighted that all four founders of Elumen will assume significant roles in CTG HealthCare Solutions. Their involvement and collective expertise combined with that of CTG's health care leadership team will be powerful in attracting new clients and new IT professionals. Elumen's track record and proprietary methodologies such as AssureWare(R) which were developed working for large nationally known health care organizations strengthens our ability to grow faster than the sector's growth rates."

Christopher J. Bergmann, president and chief executive officer of Elumen, commented, "Aligning with CTG will enable us to accelerate growth by significantly increasing the resources available to build our business and by complementing our service offerings with CTG's capabilities in application management and outsourcing, network design, implementation and management, project management and systems integration. In addition to the synergies created by combining our health care IT consulting practices, there is an excellent fit in our cultures and values. We look forward to joining CTG which has been consistently recognized by Computerworld as one of the 100 best places to work in IT."

Fitzgerald concluded, "With this acquisition, the health care segment will initially represent about 10% of CTG's total revenues and will drive additional higher value managed services. Longer term, we see the significant growth expected from this business segment contributing substantially to CTG's overall growth in revenues and profitability."

CTG was advised by BT Alex. Brown, Incorporated and Elumen Solutions was advised by the Beacon Group in this transaction.

Elumen Solutions, Inc. is a leading independent information technology consulting firm dedicated exclusively to the health care industry. Elumen Solutions offers Chief Information Officers and similar decision makers in health care institutions a broad portfolio of information technology consulting services designed to address and resolve current high-priority information technology issues. Specific major services offered include Software Implementation Solutions, Systems Integration Solutions, and Managed Outsourcing Solutions.

CTG provides IT solutions to Fortune 500 and other companies through strategic partnerships. Leveraged by more than 30 years' experience, CTG manages IT services for some of the world's leading companies so they can focus on their core businesses and use IT, which has become vital to competitiveness, to excel in their markets. CTG's resources include its 55 offices in North America and Europe, more than 6,000 IT professionals, a suite of proprietary service methodologies, strong project management expertise, and a proactive recruiting approach, CTG-SmartSource. Named by Computerworld Magazine as one of the 100 best places to work in information systems for the past three years, CTG has earned a reputation as a progressive employer.

Supplemental information regarding the Elumen acquisition is available on CTG's Web site at: http://www.ctg.com/ -0-

ELUMEN ACQUISITION SUMMARY

ACQUISITION DETAILS

Price:

$89.0 million

STRATEGIC RATIONALE FOR ELUMEN ACQUISITION

Enables CTG to significantly expand its health care IT consulting and services business into a leadership position in the industry

Is consistent with CTG's strategy to commit to Key Clients and focus on higher value managed services

Allows CTG to capitalize on the higher growth rates for IT consulting services in health care, which have resulted from increased competition, consolidation and integration of health care organizations, the impact of managed care, the streamlining and integration of multi-vendor systems and increased compliance and quality of records required by government regulations

Places CTG in a leadership position in the IT services market for the health care industry, which is projected to grow from an estimated $3.4 billion annually to $6.2 billion in 2000, a compound annual growth rate of 22%, over 30% faster than the growth rate for general IT services

Permits CTG to fully apply its services capabilities such as application management, network design and implementation, project management and systems integration to the health care sector

Demonstrated success by Elumen and its management team at building its health care IT consulting business at growth rates well above industry averages. The firm has achieved a strong reputation as a provider of high quality, comprehensive technology solutions in this specialized industry, counting many of the nation's largest and most respected health care organizations as clients

Shared vision and shared values between Elumen and CTG's Health Care Practice

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Elumen + CTG Health Care Practice = CTG HealthCare Solutions

Combined Businesses:

Offers a portfolio of IT consulting services to enable progressive health care organizations and Integrated Delivery Networks to improve patient care and service, reduce costs, and increase efficiency and effectiveness through the use of information technology. CTG HealthCare Solutions offers three principal service lines: software implementation (SMS, HBOC, IDX, Meditech, Cerner), systems integration services including network design and implementation, and managed outsourcing services such as Application Management, Network Management and Helpdesk Management.

Approximate Sales:

$44 million during 1998

Health Care IT Consultants:

300+

Major Customers Include:

SMS (Shared Medical Systems), Johns Hopkins University Hospital, Ohio State University, MD Anderson Cancer Center, The Health Alliance of Greater Cincinnati, University of Pennsylvania Health System, the University of Alabama--Birmingham, the University of Maryland, the Daughters of Charity, Kaiser Permanente, and Roswell Park Cancer Institute.

Today's news release, along with CTG news releases for the past year, is available by fax at no charge by calling Corporate News on the Net at [phone]. Additional information about CTG is available on the World Wide Web at these addresses: http://www.ctg.com and http://www.businesswire.com/cnn/tsk.htm

This document contains certain forward-looking statements concerning the Company's current expectations as to future growth. These statements are based upon a review of industry reports, current business conditions in the areas where the Company does business, the availability of qualified professional staff and other factors which involve risk and uncertainty. As such, actual results may differ materially in response to a change in such factors. Such forward-looking statements should be read in conjunction with the Company's disclosures set forth in the Company's 1997 Form 10-K and the Management's Discussion and Analysis section of the Company's 1997 annual report, which are incorporated by reference.