But while this may seem like bad news for the companies competing with this new giant, many in the industry believe the merger will do more good than harm. MedQuist was already the largest medical transcription provider, and its acquisition of Spheris, the second largest, makes it four times larger than its nearest competitor, Transcend Services. “Typically, the stalking horse packaged auctions end up going to the stalking horse,” says Sean Carroll, CEO of Webmedx, now the third largest medical transcription provider, “largely because they have a significant advantage during the process but also because they become so vested in winning the outcome that they get to a point where they really have to make sure they win the business.”Īt first glance, this appears to be a case of the rich getting richer. They’ve invested in the industry before, successfully, and it was just logical that they would go after them,” says Dale Kivi, MBA, director of business development for transcription service and technology provider FutureNet Technologies. “It was not surprising that MedQuist and CBay would make a big play for. Although the auction process had captured the attention of the entire medical transcription industry, to say that the outcome was unexpected would be an overstatement. The auction included MedQuist, Transcend Services, and Nuance, which was disqualified due to a conflict of interest.
The purchase price was agreed on as a result of a bankruptcy auction set in motion in February after Spheris filed for Chapter 11 protection and MedQuist made an initial offer, known as a stalking horse bid. On April 15, MedQuist Inc and its majority shareholder, CBay Inc, received court approval to purchase Spheris for $116 million. The Effects of the MedQuist/Spheris Merger
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