M*Modal sells speech recognition and natural language processing software, which enables structured data to be pulled from dictation and placed in an electronic health record. The structured data enhances the information in a patient record and also is available for analysis. The deal follows a major strategic move from MedQuist in 2010 as it acquired bankrupt rival Spheris Inc.
Under acquisition terms for M*Modal, MedQuist will pay $77.2 million in cash and 4.1 million shares of stock. Pittsburgh-based M*Modal currently has an annual revenue run rate of $24 million, which includes payments from MedQuist as a customer. The companies expect the acquisition to close by the end of the third quarter of 2011.
At MedQuist, Davenport succeeds Bob Aquilina as chair and Peter Masanotti as CEO. Aquilina will remain on the board and Masanotti will consult for MedQuist through September 2011. As part of Davenport's employment package, the company granted him 250,000 restricted shares of common stock that will vest proportionally over a three-year period based on continued service.
Davenport most recently served as a senior advisor at Quntiles. He has had executive positions at Allscripts, Misys Healthcare, Eastman Kodak's health division, IBM and Shared Medical Systems/Siemens.
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