Medical transcription company MedQuist has entered into a “stalking horse” purchase agreement with clinical documentation company Spheris for its domestic business. The agreement must be approved by the courts, as the Franklin, Tenn.-based Spheris recently filed for Chapter 11 bankruptcy protection.
A stalking horse purchase indicates when the debtor offers bidding protections such as breakup fees to its best bidder before the auction.
The proposed transaction will take place pursuant to Section 363 of the U.S. Bankruptcy Code and will be governed by a court-directed bidding process, subject to applicable regulatory, company and court approvals, Medquist said. The stalking horse agreement marks an attempt to maximize the value of Spheris' assets, offering undisclosed bidding protections as part of or before the court-approved process begins.
As part of the transaction, CBay, MedQuist’s majority owner, will acquire the stock of Spheris India Private Limited, a subsidiary of Spheris, which also provides medical transcription technology and services.
According to MedQuist, Spheris’ customers will be able to leverage MedQuist programs including SpeechQ speech recognition for radiology and general medicine, DocQvoice for capturing dictation and computer-assisted coding and abstracting as a result of the transaction. Additionally, Spheris’ customers are expected to benefit from MedQuist’s healthcare management platform DocQment Enterprise Platform, MedQuist, of Mount Laurel, N.J. stated.
If the purchase agreement is approved and the conditions therein satisfied, transaction is expected to be completed in the first half of 2010, according to Medquist.