CBaySystems Holdings has acquired Koninklijke Philips Electronics NV's 69.5 per cent stake in MedQuist, the world's largest medical transcription services company, for $287 million. The price is equivalent to $11 per MedQuist share and represents a 47 per cent premium to the closing price of the company's shares on May 21, 2008.
Headquartered in Mount Laurel, New Jersey, MedQuist provides a suite of healthcare technology and medical transcription services to over 1,500 hospitals and large physician practices in the US. For the year ended December 31, 2007, MedQuist reported total revenues of $340.3 million.
The acquisition will close by the third quarter of 2008 and are conditional on applicable regulatory approvals, approval by the shareholders of CBaySystems Holdings and re-admission of the enlarged CBaySystems Holdings shares to trading on the AIM market, among other conditions. However, this is subject to certain regulatory and other conditions.
MedQuist will operate independently with its own executive management under the financial oversight of the holding company. It is anticipated that, over time, synergistic opportunities may be identified among the operating companies within CBaySystems Holdings to enable them to enhance their portfolios of products and services, to accelerate growth, to improve operational performance, and to better serve the needs of their customers.
Raman Kumar, Chairman and CEO of CBaySystems Holdings said: "MedQuist, as the world's largest medical transcription company, has impressive technology, management and employees. We look forward to working with the MedQuist team as it seeks to enhance MedQuist's revenue growth and to deliver an ever-expanding portfolio of products and services to MedQuist's customers. We welcome the support of SAC PCG and Lehman Brothers in this transaction, which we believe will be of significant value to all stakeholders."
CBaySystems is getting a funding of over $123 million from S.A.C. Private Capital Group and Lehman Brothers, which will be used for the acquisition. The company is also raising money through convertible issues and short-term notes for the acquisition.
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