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Toronto Stock Exchange Symbol: SXC

MILTON, Ontario (February 7, 2001) -- Systems Xcellence Inc. (TSE: SXC) announced today that it has entered into a Letter of Intent to acquire a leading US - based developer of software solutions and provider of application processing services for the US healthcare industry.

The company to be acquired generated revenues in excess of $19 million for the fiscal year ended December 31, 2000 and is expected to be accretive to cash earnings of Systems Xcellence in fiscal 2002. The acquisition is expected to enable the Company to take advantage of operational and strategic synergies to accelerate its growth strategy in the US healthcare transaction processing market.

The acquisition has been approved by the Board of Directors of both companies and is subject to various closing conditions, including regulatory approvals. The purchase will be financed through a combination of existing cash resources, debt and new equity. Additional information will be released when a definitive purchase agreement has been finalized.

In connection with the acquisition, the Company has signed an engagement letter with Sprott Securities Inc. of Toronto, to raise a minimum of $13 million and a maximum of $16 million through the sale of Special Warrants. Each Special Warrant will, subject to adjustment, be exercisable for one unit (a "Unit") consisting of one common share (a "Common Share") and one-third of one common share purchase warrant following the issuance of receipts for a final prospectus. Each whole common share purchase warrant (a "Warrant") will entitle the holder thereof to purchase one Common Share at a price of $1.10 per share until the date which is 24 months following the closing of the offering. The Special Warrants will be priced at $0.80 each and will be placed on a "best efforts" agency basis to qualified investors.

As a part of this financing the Company has also entered into a letter agreement with a leading Toronto-based institutional investor that has agreed to subscribe for Special Warrants for gross proceeds of $6 million. It is also expected that a significant shareholder of the Company will subscribe for Special Warrants for gross proceeds of up to $4.8 million.

Systems Xcellence is headquartered in Milton, Ontario, and provides advanced online transaction processing solutions for the healthcare benefits management industry. The Company combines robust software products, business expertise, and processing services to deliver superior solutions to the global healthcare industry.