Posts Tagged 'sale'

And the Winner is…

 All right, where were we? Back in November, Philips had announced its intention to sale its 70% ownership interest in transcription software company Medquist, however leaving the crucial question unanswered: who would take over custody? The Dutch Giant showed up on stage again yesterday, providing the audience with a much clearer roadmap. So the winner is…

  • CBay Systems Holdings (AIM: CBAY) (“CBay”)
  • Sale price: USD 11.00 per share, or “approximately USD 285 million (approximately EUR 185 million). The USD 11.00 per share purchase price represents a premium of 47% over the most recent trading price of MedQuist’s stock.”
  • Big picture: “The acquisition of the approximate 69.5% shareholding in MedQuist will complement CBay Systems Holdings’ existing portfolio of businesses in medical transcription, healthcare technology, and healthcare financial services, including CBay Systems & Services Inc, CBay Systems Private Ltd. and Mirrus Systems.”
  • Time frame: “The sale of Philips’ stake in MedQuist is expected to close during the third quarter of 2008, and is conditional upon applicable regulatory approvals, approval by CBay shareholders at a general meeting of shareholders, and the fulfillment of specific closing conditions.”
  • Payment: “In connection with this transaction, Philips will receive cash and a promissory note equivalent to approximately USD 7.50 per share, amounting to approximately USD 195 million (approximately EUR 125 million). The remaining per share consideration of approximately USD 3.50 per share will be paid to Philips in the form of a 7-year bond convertible into common stock of CBay.”
  • Accounting wise: “The financial results related to this transaction, which are expected to be immaterial, will be booked under “Discontinued Operations” in Philips’ third quarter 2008 results.”

    (source: Philips, May 22, 2008 press release)

What a cool start for MEDQ Saga, Season Two…

MedQuist Saga Update…

MedQuist Saga Update… Following a November 07 announcement in which Philips mentioned that they were reviewing their options for shelving in MedQuist, Philips CFO Pierre-Jean Sivignon said on January 21 that they were “hoping to finalize this in the near future.”

On the other hand, MedQuist’s activist shareholder Costa Brava Partnership III LP, which currently holds 1,938,821 shares (5.2% of the total outstanding), sent a letter to the MedQuist board expressing concern about whether the interests of minority stockholders were being fairly represented in the proposed sale of MedQuist. Costa Brava said they “will hold the MedQuist board of management liable if minority shareholders do not receive benefits equal to majority shareholder Royal Philips Electronics NV ahead of a possible sale of the entire company.” >More

…to be continued…

Philips Gets Rid of MedQuist

Philips Gets Rid of MedQuist 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

More recently…

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.


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