CBay Holdings, a leading provider of technology-enabled clinical documentation and related healthcare revenue cycle solutions, is to acquire select operating assets and liabilities of US-based Spheris Holdings II, Inc. through two of the company’s subsidiaries, MedQuist Inc and CBay Inc.
The United States Bankruptcy Court for the District of Delaware has approved the sale of select operating assets and liabilities of Spheris Holdings II, Inc., Spheris Inc., Spheris Operations LLC, Vianeta Communications, Spheris Leasing LLC and Spheris Canada Inc., following Spheris’ filing for Chapter 11 bankruptcy protection on February 3, 2010, to the CBay Holdings Subsidiaries.
Under the terms of the acquisition, MedQuist will acquire Spheris’ North American assets and CBay Inc will acquire the entire stock of Spheris India Private Limited. The total consideration for the acquisition is $116.3 million, to be satisfied by $98.8 million in cash and $17.5 million via an unsecured subordinated promissory note issued by MedQuist Transcription, Ltd. The company anticipates that the acquisition will close during April.
Spheris is a global provider of clinical documentation technology and services and is based in Franklin, Tennessee, with operations in North America and India. Spheris had consolidated revenues of $182.8 million and a net loss of $19.2 million for the year ended 31 December 2008. Gross assets were $275 million as at 31 December 2008, of which $219 million is goodwill.
Raman Kumar, Vice Chairman & CEO of CBay Holdings, said: “We are very pleased to welcome Spheris India to the CBay family of companies and we are confident that this acquisition will be highly complementary to the existing CBay operations in India. This strategic buy would be a strong catalyst for CBay’s growth in the future. It will significantly allow us to enhance our back-end service delivery platforms to support the business expansion that the combined talents of CBay and Spheris will drive going forward. Spheris India brings us unique set of skills and resources that is complementary to CBay.”
“The transaction further demonstrates our commitment to create a world-class Healthcare BPO that delivers maximum value to CBay’s clients and its shareholders,” Mr. Kumar added.
Mr. Suresh Nair, CEO & Managing Director, Spheris India said, “With CBay’s strong technology and quality processes, global delivery model, and outsourcing capabilities, we will be able to deliver enhanced value to our clients. We are excited at the prospect of becoming part of a strong, global group.”