Another major transaction-to-be in what could be called the supermarket of healthcare IT businesses… Philips confirmed yesterday its intention to sale its 70% ownership interest in transcription software company MedQuist (Pink Sheets:MEDQ) and take a fourth-quarter charge of 320 million euros (> more on the financial aspects here). This announcement follows a number of telltale press releases from earlier this year:
- July 6, 2007: Philips indicated it was reviewing all of its future options with respect to its stake in MedQuist, which it now viewed as a non-core holding.
- October 4, 2007: MedQuist announced that it had become current in its SEC filings.
A bit of history
MedQuist isn’t exactly the happiest investment a giant like Philips could have been dreaming of. 1.3 billion is the total amount Philips paid for its stakes in the Mount Laurel, NJ, company back in 2000. Only 3 years later, class action suits questioning Medquist’s billing procedures started piling up, leading to its delisting from Nasdaq in June 2004 after failing to meet reporting requirements. The company was then investigated by the Securities and Exchange Commission over alleged improper billing and the Department of Labor over administration of its 401(k) retirement plan.
> More on the MedQuist billing controversy
Adding to an already heavy conjuncture, another MedQuist stakeholder surfaced on October 30 with a “missive seeking to inspect the medical billing company’s shareholder list, books and other records for the past seven years”, according to a regulatory filing on Tuesday. In this letter, the shareholder, Costa Brava Partnership III LP, “demands that such an inspection take place on or before Friday, Nov. 9, 2007.” > More
About MedQuist, Inc.
MedQuist, which has a $416 million stock market capitalization, provides medical transcription technology and services in the United States. It also offers digital dictation, speech recognition, electronic signature, and medical coding technology and services.
Bizjournals.com reports that MedQuist cut 104 positions during the third quarter of 2007, and has about 8,000 employees who work as medical transcriptionists, service technicians, certified coding specialists, sales associates and engineers.