Nuance to buy medical transciption, speech firm for $300M

Nuance Communications has signed a definitive agreement to acquire Transcend Services, a medical transcription and speech editing services company, for approximately $300 million, net, in cash.

With Transcend, the Burlington, Mass.-based Nuance said it will seek to access and expand its customer base within the small- to mid-size hospital market. The firms will combine Nuance’s voice-enabled and Clinical Language Understanding technologies and EHR integration with Transcend’s transcription and editing services.

Nuance said that members of Transcend's management team will be rolled into Nuance with the merger, including Susan McGrogan, Transcend’s president and chief operating officer, and Lance Cornell, Transcend’s chief financial officer.

Nuance has reportedly agreed to acquire the Atlanta-based Transcend through a cash tender offer of $29.50 per Transcend share, representing an approximately 30 percent premium more than Transcend’s 90-day volume weighted average share price. The transaction has been unanimously approved by the board of directors of each company. Based on Transcend’s 11.1 million diluted weighted average shares outstanding as of Dec. 31, 2011, the acquisition is valued at approximately $300 million, net of Transcend’s estimated cash at closing. The transaction is expected to close in the second half of Nuance’s fiscal 2012, subject to regulatory approval and other conditions.

The tender offer is expected to commence on or before March 20. The offer will be open for a period of not less than 20 business days from its commencement and will be conditioned upon valid acceptances of the offer in respect of shares representing at least a majority of the outstanding Transcend shares on a fully diluted basis as well as other closing conditions, including receipt of required regulatory approval. The transaction will be financed through cash on hand at Nuance.