Medical transcription service Medquist Holdings Inc. said Monday it would buy speech recognition software maker M*Modal for a cash-and-stock deal worth $130 million. The Franklin, Tenn.-based company also named Roger L. Davenport its new CEO and chairman.
Medquist said it would pay $77.2 million in cash and 4.1 million shares of common stock, worth $52.8 million, based on a $12.76 share price average of the trailing 10 trading days before the agreement was signed. The company said $48.4 million in cash would be paid when the deal closed, with $28.8 million doled out over the next three years.
The deal, subject to customary closing conditions, is expected to close before the end of the third quarter.
M*Modal, based in Pittsburgh, makes cloud-based software that uses natural language processing to turn spoken, narrative medical information into structured reports, which can be attached to electronic health records. The company said it has an annual revenue run rate of $24 million.
"This transaction combines MedQuist's strengths of capturing the physician narrative, our large customer base, global presence and deep domain expertise in health care with the innovations of M*Modal's currently available technologies and strong product roadmap," Davenport said in a statement.
On Monday, Medquist also announced its board of directors appointed Davenport CEO and chairman, taking up a position previously held by two people: Bob Aquilina, as chair, and Peter Masanotti, as CEO.