MModal Inc., a provider of medical document processing technology, said it agreed to be bought by a JPMorgan Chase & Co. unit for about $1.1 billion.
One Equity Partners, JPMorgan’s private investment arm, will pay $14 a share in cash for MModal, or 8.3 percent more than the stock’s July 2 closing price, the Franklin, Tennessee-based company said in a statement today. MModal’s board accepted the offer, to be made in a tender on or before July 17 and expected to be completed by September, it said.
The acquisition values MModal at 8.46 times earnings before interest, taxes, depreciation and goodwill amortization, compared with an average 21.3 times among 10 comparable deals, according to data compiled by Bloomberg.
An official at One Equity in Hong Kong wasn’t able to immediately respond to an interview request. One Equity manages about $11 billion of assets, according to the statement. It has invested about $9 billion since 2001 buying more than 60 companies across the chemicals, health care, technology, travel and manufacturing industries, the New York-based group said on its website.
Investment funds affiliated with S.A.C. Private Capital Group LLC represent the largest shareholding in MModal with about 31 percent, and have agreed to sell their shares in support of the transaction, according to MModal.
MModal has 12,000 employees in five countries, and more than 140 patents and licenses for speech recognition and understanding technology, according to its website.
Macquarie Group Ltd. is acting as lead financial adviser to MModal, which is also being advised by RBC Capital Markets, with Simpson Thacher & Bartlett LLP is acting as legal counsel, MModal said. It said One Equity, which has obtained equity and debt financing for the transaction, was advised by Bank of America Corp. and RBC Capital Markets. Dechert LLP is providing legal counsel, it said.