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M*Modal Gets Acquired, Goes Private

July 3, 2012
by Gabriel Perna
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M*Modal, a Franklin, Tenn.-based provider ofclinical documentation services, has been acquired by which One Equity Partners, the private investment arm of JP Morgan Chase & Co. One Equity will acquire all of the outstanding shares of M*Modal for $14.00 per share in an all-cash transaction valued at approximately $1.1 billion.

The agreement, which was unanimously approved by M*Modal’s Board of Directors, says that M*Modal shareholders will receive $14.00 in cash for each outstanding share of M*Modal common stock they own representing an 8.3 percent premium over the closing price on July 2, 2012, the last full trading day before today’s announcement, as well as, a 19.3 percent premium over the 180-day volume weighted average closing price of M*Modal common stock ending on such date and a 33.8 percent premium over the 52-week volume weighted average closing price of M*Modal common stock ending on such date.

The deal is expected to close during the third quarter of 2012.

“M*Modal continues to reach major milestones in technological innovation, product leadership and customer successes,” Vern Davenport, Chairman and CEO of M*Modal, said in a statement. “One Equity Partners matches our passion and drive, and we believe will be the right financial partner to accelerate our strategic goals and further enhance our leadership position as the entire industry focuses on improving the cost and quality of care. Our focus is and will continue to be on serving customers through our clinical documentation services and Speech Understanding™ solutions that unlock value from the ‘unstructured’ clinical narrative.”

It is likely that One Equity Partners will commence a tender offer for all of the outstanding shares of M*Modal not later than July 17. M*Modal’s Board of Directors has unanimously recommended that M*Modal’s shareholders tender their shares into the offer. If the tender offer is completed, untendered shares of M*Modal will be converted in the merger into the right to receive the same $14.00 per share price paid in the tender offer.

Investment funds affiliated with S.A.C. Private Capital Group LLC (S.A.C. PCG), collectively M*Modal’s largest shareholder owning approximately 31 percent of M*Modal’s outstanding shares in the aggregate, have agreed to tender their shares into the offer and to support the transaction.



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