MedQuist Holdings Inc. (Nasdaq:MEDH), a leading provider of
integrated clinical documentation solutions for the U.S. healthcare
system, announced today that it has closed on the acquisition of
M*Modal. The Company received notification of early termination of
the mandatory, pre-merger waiting period under the
Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 on
Monday, August 15.
"Completion of the merger with M*Modal is an exciting time in
MedQuist's history," said Vern Davenport, Chairman and CEO of
MedQuist Holdings. "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."
The two companies are moving aggressively with integration
plans, including organizational structure and product strategies.
"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."
Incremental Contribution to 2011 Financial
Results
The Company has projected the acquisition of M*Modal, which was
not included in the Company's recent guidance for fiscal 2011, will
be modestly accretive to Adjusted Net Income per fully diluted
share in the fourth quarter of 2011 and will increase the Company's
annualized Adjusted EBITDA run-rate by approximately $20 million by
year end 2012.
Transaction Information
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. The Company will also make $28.8 million in
installments paid in cash over the next three years to M*Modal. The
Company funded the cash component of the purchase price from
available cash. Additionally, the Company expects to incur fees and
expenses, including additional restructuring and integration costs
associated with this transaction, of approximately $13 million over
the next 12 months. 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.
In connection with and on 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.
All of these shares will vest on the third anniversary of their
grant date so long as they remain in continued service to the
Company. The restricted shares will become fully vested upon a
change in control of the Company or their deaths, or if their
service with the Company terminates without cause, due to
disability or due to resignation with good reason, so long as they
timely execute a release of claims. The shares were granted to
Messrs. Finke, Koll and Fritsch as "inducement awards" and
therefore, consistent with applicable NASDAQ rules, did not reduce
the shares reserved for issuance under the Company's stockholder
approved equity plans.
On the closing date of the merger, in addition to the restricted
shares granted to Messrs. Finke, Koll and Fritsch and to encourage
other employees of M*Modal to join the Company, the Company granted
to 89 employees of M*Modal that became employees of the Company or
one of its subsidiaries up to an aggregate of 391,782 restricted
shares of the Company's common stock. For each such employee,
such employee's restricted shares will vest proportionally over a
three-year period based on such employee's continued service,
subject to full acceleration upon termination without cause or
resignation with good reason. The shares were granted to such
employees as "inducement awards" and therefore, consistent with
applicable NASDAQ rules, did not reduce the shares reserved for
issuance under the Company's stockholder approved equity plans.
About MedQuist
MedQuist is a leading provider of medical transcription
services, and a leader in technology-enabled clinical documentation
workflow. MedQuist's enterprise solutions – including mobile voice
capture devices, speech recognition, Web-based workflow platforms,
and global network of medical editors – help healthcare facilities
improve patient care, increase physician satisfaction, and lower
operational costs. For more information, please visit
www.medquist.com.
The MedQuist Holdings Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=10083
About M*Modal
M*Modal, a leader in advanced Speech and Natural Language
Understanding technology, transforms narrative medical
documentation into structured, encoded information to create
meaningful, valuable clinical intelligence that can be shared,
analyzed, and used to inform collaborative care. More than 800
healthcare organizations nationwide utilize M*Modal's solutions to
re‐define the role of clinical narrative in improving and promoting
quality of care, clinical efficiency, financial performance, and
EHR adoption. For more information, please visit
www.mmodal.com.
Forward-Looking Statements
Information provided and statements contained in this press
release that are not purely historical, such as
statements regarding the impact of MedQuist's acquisition of
M*Modal, are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, Section 21E of the
Securities Exchange Act of 1934 and the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements only
speak as of the date of this press release and MedQuist Holdings
Inc. assumes no obligation to update the information included in
this press release. Statements made in this press release that are
forward-looking in nature may involve risks and uncertainties.
Accordingly, readers are cautioned that any such forward-looking
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict, including, without limitation, specific factors
discussed herein and in other releases and public filings made by
MedQuist Holdings Inc. (including filings by MedQuist Holdings Inc.
with the SEC). Although MedQuist Holdings believes that the
expectations reflected in such forward-looking statements are
reasonable as of the date made, expectations may prove to have been
materially different from the results expressed or implied by such
forward-looking statements. Unless otherwise required by law,
MedQuist Holdings also disclaims any obligation to update its view
of any such risks or uncertainties or to announce publicly the
result of any revisions to the forward-looking statements made in
this press release.
Non-GAAP Financial Measures
We have provided Adjusted EBITDA, a non-GAAP financial measure,
on a forward-looking basis in this release. We are unable to
present a quantitative reconciliation of this forward-looking
non-GAAP financial measure to the most directly comparable
forward-looking GAAP financial measures because management cannot
predict, with sufficient reliability, contingencies relating to
potential changes in tax valuation allowances, potential changes to
customer accommodation accruals, potential restructuring impacts,
contingencies related to past and future acquisitions, and changes
in fair values of our derivative instruments, all of which are
difficult to estimate primarily due to dependencies on future
events.
Adjusted EBITDA
Adjusted EBITDA is a metric used by management to measure
operating performance. Adjusted EBITDA is defined as net income
(loss) attributable to MedQuist Holdings Inc., as applicable, plus
net income attributable to noncontrolling interests, income taxes,
interest expense, net, depreciation and amortization, cost
(benefit) of legal proceedings, settlements, and accommodations,
acquisition and restructuring charges, the effect of the sale of
our Patient Financial Services business (discontinued operations),
equity in income of affiliated company and share based compensation
and other non cash awards. We present Adjusted EBITDA as a
supplemental performance measure because we believe it facilitates
operating performance comparisons from period to period and company
to company by backing out the following:
• potential differences caused by variations in capital
structures (affecting interest expense, net), tax positions (such
as the impact on periods or companies for changes in effective tax
rates), the age and book depreciation of fixed assets (affecting
depreciation expense);
• the impact of non-cash charges; and
• the impact of acquisition and integration related charges,
restructuring charges, and certain unusual or nonrecurring
items.
Because Adjusted EBITDA facilitates internal comparisons of
operating performance on a more consistent basis, we also use
Adjusted EBITDA in measuring our performance relative to that of
our competitors. Adjusted EBITDA is not a measurement of our
financial performance under GAAP and should not be considered as an
alternative to net income, operating income or any other
performance measures derived in accordance with GAAP or as an
alternative to cash flow from operating activities as measures of
our profitability or liquidity. We understand that although
Adjusted EBITDA is frequently used by securities analysts, lenders
and others in their evaluation of companies, Adjusted EBITDA has
limitations as an analytical tool, and you should not consider it
in isolation, or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:
• Adjusted EBITDA does not reflect our cash expenditures or
future requirements for capital expenditures or contractual
commitments;
• Adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs;
• Although depreciation is a non-cash charge, the assets being
depreciated will often have to be replaced in the future, and
Adjusted EBITDA does not reflect any cash requirements for such
replacements; and
• Other companies in our industry may calculate Adjusted EBITDA
differently than we do, limiting its usefulness as a comparative
measure.
CONTACT: MedQuist Investors:
Tony James
Chief Financial Officer
tjames@medquist.com
(615) 261-1509
Tripp Sullivan
Corporate Communications, Inc.
tripp.sullivan@cci-ir.com
(615) 324-7335
MedQuist Media:
Thomas Mitchell
Director of Marketing
tmitchell@medquist.com
(615) 798-6630
Medx (CE) (USOTC:MEDH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Medx (CE) (USOTC:MEDH)
Historical Stock Chart
From Jul 2023 to Jul 2024