One Equity Partners, the investment arm of JP Morgan Chase & Co., will acquire M*Modal, formerly known as MedQuist Holdings, for $1.1 billion.
MedQuist, a major medical dictation/transcription services and software firm, in 2011 acquired M*Modal, a speech recognition and natural language processing vendor, for $130 million in cash and stock. That sale followed MedQuist’s 2010 acquisition of bankrupt rival Spheris Inc.
In early January 2012, MedQuist changed its name to M*Modal to reflect the unification of the company’s services, which also include coding, data analytics and health information management professional services, particularly transcription.
The 2011 M*Modal acquisition substantially enhanced the services that MedQuist could offer to transcription and coding clients. MedQuist picked up speech recognition and natural language processing software that 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.
Under terms of the One Equity Partners/JP Morgan acquisition, M*Modal shareholders will receive $14 per share, an 8.3 percent increase over the closing price on July 2, and a 19.3 percent increase over the 180-day average price. M*Modal’s largest shareholder, S.A.C. Private Capital Group, holding nearly one-third of the stock, is supporting the transaction. Still, at least one law firm, Tripp Levy PLLC, has announced a shareholder investigation of the fairness of the acquisition, asserting the company’s value is at least $16 per share.
In a statement, Dick Cashin, managing partner of One Equity Partners, said the company will support M*Modal’s “outstanding management team,” which includes Chairman and CEO Vern Davenport, an industry veteran who joined the company a year ago.
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