M*Modal Inc. (MODL) has agreed to be acquired by One Equity Partners for $14 per share or a total of about $1.1 billion in an all-cash deal, the two companies said Monday. One Equity Partners is the private investment arm of JP Morgan Chase & Co. (JPM).
Franklin, Tennessee-based M*Modal is a provider of clinical transcription services, clinical documentation workflow solutions and cloud-based speech understanding technology.
Under the terms of the deal unanimously approved by the company's board of directors, shareholders will receive $14 in cash for each outstanding share held by them.
The offer price represents an 8.3 percent premium over M*Modal's closing stock price of $12.93 on Monday, July 2, the last full trading day before the announcement. The deal is expected to close during the third quarter of 2012.
Affiliates of One Equity Partners will commence a tender offer for all of the outstanding shares of M*Modal not later than July 17. M*Modal's board of directors have unanimously recommended its stockholders tender their shares into the offer.
Dick Cashin, Managing Partner of One Equity Partners said, "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."
Cashin added, "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."
One Equity Partners said it has secured committed financing, consisting of a combination of equity and debt financing, to purchase all of M*Modal's outstanding shares and refinance existing debt.
Investment funds affiliated with S.A.C. Private Capital Group LLC, collectively M*Modal's largest shareholder with a 31 percent stake, have agreed to tender their shares into the offer and to support the transaction. S.A.C. PCG is a private equity firm managed by the founders of Siris Capital Group, LLC.
In early May, M*Modal reported a net loss for the first quarter of $2.9 million or $0.05 per share, compared to net income of $2.3 million or $0.05 per share in the year-ago period. Net revenues grew 6 percent to $117.4 million from $111.2 million in the prior-year quarter.
Founded in 2001, One Equity Partners currently manages an $11 billion portfolio of proprietary investments and commitments of JP Morgan Chase.
One Equity Partners earlier this month agreed to acquire outsourced services and solutions provider APAC Customer Services Inc. (APAC) for about $470 million in cash. Following the deal, One Equity, which is the majority owner of BPO services provider NCO Group, Inc., will seek to combine APAC with NCO Group to build market leadership in BPO and customer care solutions.
MODL closed Monday's trading at $12.93, down $0.05 or 0.39 percent on a volume of 262,793 shares.
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