Redmond, Wa. -- An agreement to sell profitable, venture-backed health care software company Sentillion Inc. to Microsoft Corp. provides a "very positive" outcome for the company and investors, Newbury Ventures Senior Managing Director Bruce J. Bauer said Thursday after backing the company for ten years.

Financial terms of the deal were not disclosed. The agreement comes after Andover, Mass.-based Sentillion raised about $29.5 million in venture capital funding since its founding in 1998, when it spun its technology out of Hewlett-Packard Co.

Microsoft and Sentillion formed a partnership earlier this year, following some familiarity with Sentillion's HP pedigree, said Sentillion Chief Executive Robert Seliger. With that licensing agreement, formed in April, Sentillion provides its single sign-on and context management technology to serve as a module for Microsoft's system for health care professionals, Amalga.

This marks the fifth and largest acquisition so far for Microsoft in the health care space, said Peter Neupert, corporate vice president of Microsoft Health Solutions Group. That group, formed in 2005, works to unify access to health care information through its open consumer platform, called HealthVault, and Amalga, its enterprise technology for health care organizations.

Microsoft plans to combine Sentillion's technology with its real-time technology for the aggregation of administrative, clinical and financial information. Through the combination, Microsoft aims to improve the amount, speed and simplicity with which it provides patient information.

The deal will also significantly expand Microsoft's reach, as Sentillion currently has about 10times the footprint of Microsoft's technology, Neupert said. Sentillion currently serves more than 1,000 hospitals serving 160 health care organizations. Amalga is currently used in more than 115 hospitals. The companies have an undisclosed number of overlapping customers.

"What they can do going forward is very powerful," said Newbury's Bauer, a Sentillion board member who has worked with the company since it spun out of HP. "It's a very strong synergistic fit."

Sentillion, which is into its ninth profitable quarter in a row, also considered other potential partnership and acquisition transactions, Bauer said. Depending on market conditions, the company could also have been a potential candidate for an initial public offering, he said.

The Microsoft transaction provides a "very positive" outcome for all involved, said Bauer, who declined to elaborate on the potential return for Newbury. The exit comes as Newbury plans to begin raising a fourth fund next year, he said, and helps wrap up its $55 million second fund from 1997. In addition to Sentillion, that fund has two remaining investments, now public, which could each provide about 5-times returns as the firm prepares to sell its remaining shares to wind up the fund by next year. Those companies include Bridgewater Systems and another undisclosed company.

Other Sentillion investors were not available for comment. Previous investors, according to VentureWire records, also include Dresdner Kleinwort Capital, First Consulting Group, Intersouth Partners, Life Sciences Investment Fund, Merrill Lynch Ventures, Polaris Venture Partners, Split Rock Partners and Universal Health Services.

The acquisition is scheduled to close early next year. Sentillion will remain in its Andover, Mass., location, while its 110 employees will also join Microsoft.