Transcend services (Transcend) has entered into an agreement to acquire Medical Dictation Services (MDI) for $16.2m.
Reportedly, the $16.2m purchase price consists of $10m in cash payable at closing, $2.0m in cash payable after receipt of interim financial statements and audited financial statements for the last two fiscal years. Also, $2.0m note payable to the selling shareholder due one year after closing, and $2.0m of Transcend common stock (119,940 shares).
Lance Cornell, chief financial officer of Transcend, said: Upon closing, Transcend’s consolidated annualized revenue run rate will reach approximately $82m. This transaction shows how we can use a combination of cash on hand and conservative financial leverage to acquire mid-sized medical transcription companies that quickly become accretive to earnings.
We expect the integration with Transcend, including the conversion of some of MDI’s business to Transcend’s speech recognition-enabled BeyondTXT platform, to increase MDI’s earnings before interest, taxes, depreciation and amortization (EBITDA) margin as a percentage of revenue from the mid-teens today to 20% or more a year from now.