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The transaction will be governed by a bidding process, which is subject to regulatory and court approvals.

CBay Holdings, an AIM-listed provider of medical transcription services, is acquiring Spheris Inc, a bankrupt company in the similar space. The company has signed an agreement with Spheris through its subsidiaries, MedQuist Inc. and CBay Inc,.to purchase select operating assets and liabilities of Spheris in multiple geographies, it said in a statement. 

The transaction will be governed by a bidding process, which is subject to regulatory and court approvals. Spheris has filed for bankruptcy protection under the United States Bankruptcy Code on February 3, 2010. If the deal is approved, it is expected to be complete in the first half of 2010. 

MedQuist Inc., which provides medical transcription software and services in the US, will acquire the domestic and Canadian business of Spheris, while CBay Inc., which is the majority owner of MedQuist, will acquire the stock of Spheris’ Indian subsidiary, Spheris India Private Ltd, added the statement.

MedQuist will acquire substantially all of the US and Canadian operating assets and select liabilities of Spheris for $75.2 million. CBay, on the other hand, will acquire all of the outstanding ownership interests of Spheris India Pvt Ltd in exchange for assuming its liabilities.

Spheris is based in Tennessee in the US, and has operations in North America and India. In India, the company runs its operations out of Bangalore. It had consolidated revenues of $182.8 million and a net loss of $19.2 million for the year ended December 31, 2008. 

CBaySystems Holdings Ltd is a diversified group with businesses including CBay Systems & Services Inc, CBay Systems India Pvt Ltd, Mirrus Systems Inc. It is the majority shareholder in MedQuist Inc with around 69.5% stake.