Mergers & Acquisitions

Mergers & Acquisitions

August 19, 2011

MedQuist Holdings Closes the Merger with M*Modal

MedQuist Holdings, a provider of integrated clinical documentation solutions for the U.S. healthcare system, announced that it has closed on the acquisition of M*Modal, a provider of Speech Understanding solution that enables more meaningful documentation.

The closing price included $48.4 million in cash and the issuance of 4.1 million shares of MedQuist Holdings common stock paid at closing. In addition to these, MedQuist Holdings will also make $28.8 million in installments paid in cash over the next three years to M*Modal.

“Completion of the merger with M*Modal is an exciting time in MedQuist's history,” said Vern Davenport, chairman and CEO of MedQuist Holdings, in a statement. “The combination of these two companies will enable the healthcare industry to realize meaningful benefits of clinical documentation through highly differentiated information for financial and clinical decision support capabilities.”

Following the acquisition, the companies are planning to integrate their organizational structure and product strategies. The founders and senior executives of M*Modal, Michael Finke, Detlef Koll and Juergen Fritsch will remain deeply involved in the company on a go-forward basis.

“We are aligning the resources between the two companies and focusing on a strategic roadmap that will provide the greatest benefit for our customers, investors, employees and the marketplace,” Davenport added. “With the best talent in the industry today, we will provide technology-enabled solutions for clinicians that are backed by world-class services for value-based healthcare delivery.”

MedQuist Holdings has projected the acquisition of M*Modal will be modestly accretive to Adjusted Net Income per fully diluted share in the fourth quarter of 2011. It will also increase the Company's annualized Adjusted EBITDA run-rate by approximately $20 million by year end 2012, according to official estimates.

As part of the closing date of the merger with M*Modal, the Company granted inducement awards of 195,894 restricted shares of common stock to Michael Finke, 117,536 restricted shares of common stock to Detlef Koll and 78,358 restricted shares of common stock to Juergen Fritsch.

The company also granted to 89 employees of M*Modal up to an aggregate of 391,782 restricted shares of the Company's common stock.

Back in June MedQuist Holdings announced it was awarded a contract by Anthelio Healthcare Solutions (formerly PHNS) of Dallas, Texas. Anthelio is implementing the company’s DocQment Enterprise Platform (DEP), a speech recognition and clinical documentation workflow platform, in eight of its clients' hospitals across five states for use by its medical transcriptionists.

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Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.

Edited by Jennifer Russell

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