News

Providence Service Corporation Completes
Acquisition of LogistiCare

Tucson, Arizona, December 7, 2007

The Providence Service Corporation (Nasdaq: PRSC) today announced that after early clearance from Hart-Scott Rodino review, it has completed its acquisition of 100% of the outstanding stock of Charter LCI Corporation, the holding company of LogistiCare, Inc., from Charterhouse Group Inc., Summit Partners and AlpInvest Partners, Inc. Based in Atlanta, Georgia, LogistiCare is the nation's largest case management provider coordinating non-emergency transportation (NET) services primarily to Medicaid recipients. The acquisition is effective December 7, 2007.

The acquisition had a purchase price of approximately $220 million, consisting primarily of cash with approximately $13.2 million in LogistiCare employee stock options that are being cancelled and exchanged into Providence Service Corporation common stock. In addition, Providence may make an earn out payment of up to $40 million in 2009, based on LogistiCare's financial performance for the fiscal year December 31, 2008.

The acquisition was facilitated through $213 million in senior secured facilities comprised of a $173 million senior term loan and a $40 million revolving line of credit that closed on December 7, 2007. CIT Capital Securities was the sole lead arranger and sole bookrunner on the senior debt transaction. In addition to the bank debt, the acquisition was expedited through Providence's issuance of $70 million of Convertible Senior Subordinated Notes due in 2014 which was arranged by RBC Capital Markets and closed on November 13, 2007.

"To be able to generate an over subscribed syndication at the low end of the marketed range in this market is a strong statement of how lenders view this combination," commented Fletcher McCusker, Chairman and CEO.

Anticipated accretion to Providence's 2008 earnings per share from the acquisition is estimated to be at the high end of the Company's previously stated range of $0.06 to $0.10. Combined EPS for 2008 is also estimated to be at the high end of the Company's previously stated range of $1.45 to $1.50. The combined company is expected to generate revenue of approximately $673 million in 2008. These estimates are after approximately $22 million of interest expense and before any effect of new business generated from the July 2008 procurement cycle for either Providence or LogistiCare.

Several states are in the process of adopting the broker model for providing non-emergency transportation during the 2008 procurement cycle and the Centers for Medicare & Medicaid recently endorsed the broker model for the Medicaid program by allowing states to develop a brokered transportation system without applying for a waiver.

Mr. McCusker added, "Payers have enthusiastically embraced the combined resources and vision of Providence and LogistiCare. We believe our focus on the front end of the Medicaid service delivery system, which is designed to keep clients at home though combined transportation case management and home based social services, is a powerful product array in the privatized arena. Our services support state policies designed to encourage the provision of Medicaid's services in home and community based settings to improve clinical outcomes and contain costs."

CIT Capital Securities and Morgan Stanley served as co-advisors to Providence on the transaction.

The combined company will provide a range of services to approximately 210,000 clients through approximately 900 contracts and will have a nearly $1 billion book of business with managed entities capable of servicing over 8 million eligible members.

About LogistiCare
LogistiCare is the nation's leading non-emergency transportation management solution, primarily for Medicaid beneficiaries. Proprietary software, innovative ride authorization strategies and a proven record of creating budget stability and program integrity distinguish LogistiCare as the leader in improving non-emergency transportation programs. From its corporate office in Atlanta and numerous state-based locations nationwide, LogistiCare manages a national network of more than 1,200 transportation companies that provide more than 13 million trips to customers annually. LogistiCare's clients include state Medicaid agencies, school boards, transit authorities, hospital systems and many of the nation's largest managed care organizations. For more information, visit www.logisticare.com.

About Providence
Providence Service Corporation, through its owned and managed entities, provides home and community based social services to government sponsored clients under programs such as welfare, juvenile justice, Medicaid and corrections. Providence operates no beds, treatment facilities, hospitals, or group homes preferring to provide services in the client's own home or other community setting. Through its owned and managed entities, Providence maintains 773 government contracts in 35 states, the District of Columbia and British Columbia as of September 30, 2007.

Certain statements herein, such as any statements about Providence's confidence or strategies or its expectations about revenues, results of operations, profitability, earnings per share, contracts, collections, award of contracts, acquisitions and related growth, growth resulting from initiatives in certain states, effective tax rate or market opportunities, constitute "forward-looking statements" within the meaning of the private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause Providence's actual results or achievements to be materially different from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, reliance on government-funded contracts, risks associated with government contracting, risks involved in managing government business, legislative or policy changes, challenges resulting from growth or acquisitions, adverse media and legal, economic and other risks detailed in Providence's filings with the Securities and Exchange Commission. Words such as "believe," "demonstrate," "expect," "estimate," "anticipate," "should" and "likely" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Providence undertakes no obligation to update any forward-looking statement contained herein.

Contacts:
Charterhouse Group:
C. Taylor Cole, Jr., Partner - (212) 584-3212
David G. Hoffman, Partner - (212) 584-3234

Charterhouse Group, Inc.
535 Madison Avenue
28th Floor
New York, NY 10022-4299
T: (212) 584-3200
F: (212) 750-9704
www.charterhousegroup.com