Transcend Services to acquire domestic medical transcription assets of Transcription Relief Services

Tue. March 31, 2009; Posted: 02:48 PM

Mar 31, 2009 (Datamonitor Financial Deals Tracker via COMTEX) -- TRCR | Quote | Chart | News | PowerRating -- Transcend Services, Inc., a provider of medical transcription services, has entered into a definitive agreement to acquire the assets of the domestic medical transcription business of Transcription Relief Services, LLC (TRS) for a total consideration of approximately $7.5 million.

TRS is a provider of medical transcription services and education for acute care hospitals, clinics, physician offices, and individual practices.

Under the terms of the agreement, Transcend will pay an initial amount of $4 million using cash on hand at closing and a promissory note for $0.5 million as a working capital adjustment payable after receipt of audited and reviewed financial statements for 2008. Additionally, an earn-out payment of up to $3 million is payable based on a combination of revenues realized in the fourth quarter of 2009 and TRS new sales backlog as of December 31, 2009.

The domestic medical transcription services business of TRS had unaudited 2008 revenue of $6.6 million and a current annualized revenue run rate of approximately $7.2 million.

Suender M&A Advisors is acting as advisor to TRS on the transaction.

The transaction is expected to close on or about April 1, 2009.

Deal Value (US$ Million) 7.5
Deal Type                Acquisition
Sub-Category             Asset Purchase
Deal Status              Announced: 2009-03-26

Deal Participants

Target (Company)   Transcription Relief Services, LLC - Domestic Medical Transcription Business Assets
Acquirer (Company) Transcend Services, Inc.
Vendor (Company)   Transcription Relief Services, LLC

Deal Rationale

TRS provides services on several different platforms and Transcend believes that over the next year, 35%-50% of the business can be migrated to its BeyondTXT platform, which would enable it to leverage its speech recognition technology to improve productivity. Upon completion of the acquisition, approximately 170 TRS employees will join Transcend.

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