M*Modal to go private in $1.1B deal
M*Modal, the developer of speech recognition and clinical documentation technology, announced Monday evening that One Equity Partners, the private investment arm of JP Morgan Chase & Co., will acquire its outstanding shares for approximately $1.1 billion.
Under the terms of the agreement, M*Modal shareholders will receive $14.00 in cash for each outstanding share of its common stock. The deal is expected to close during the third quarter of 2012.
The announcement comes almost a year after Pittsburgh-based M*Modal was acquired for $130 million by Franklin, Tenn.-based documentation firm MedQuist. In January, MedQuist changed its name to M*Modal.
"M*Modal continues to reach major milestones in technological innovation, product leadership and customer successes," said Vern Davenport, chairman and CEO of M*Modal. "One Equity Partners matches our passion and drive, and we believe will be the right financial partner to accelerate our strategic goals and further enhance our leadership position as the entire industry focuses on improving the cost and quality of care."
Davenport said his firm's focus "is and will continue to be on serving customers through our clinical documentation services and Speech Understanding solutions that unlock value from the 'unstructured' clinical narrative."
[See also: Duke taps M*Modal to complement Epic EHRs.]
Dick Cashin, managing partner of One Equity Partners, noted that M*Modal "presents a unique opportunity to acquire a market leader in clinical documentation at a time when the company has successfully released its new generation of speech understanding solutions for healthcare.
"We will support M*Modal's outstanding management team to invest in and build on M*Modal's reputation for technical innovation, and quality products and services as the company ramps up its delivery of powerful new solutions to enhance the processing and understanding of healthcare information," he added.
Within hours of the deal's announcement, securities law firm Tripp Levy PLLC announced it would investigate M*Modal's senior management and the board of directors for possible breaches of fiduciary duty, related to whether the consideration paid to M*Modal shareholders is inadequate.