Our Bureau MUMBAI
HEALTHCARE BPO firm, Cbay Systems, has acquired 70% in medical transcription firm, MedQuist, from Koninklijke Philips Electronics, for $287 million. The transaction is being part financed by a fresh equity investment of $123 million in Cbay Systems by Lehman Brothers and SAC Private Capital Group. The investment will give them a 57.8% stake in the AIM-listed Cbay.
Cbay had revenues of around $57 million in 2007 as compared to the MedQuist’s $340 million. Cbay is a holding company with investments in medical transcription, healthcare technology and healthcare recievables management. Its Indian arm, based in Mumbai, employs about 2,350 employees on its own and 3,500 through franchisees. The acquisition was done at a 47% premium to the closing price of MedQuist, the company said in a statement.
Cbay is owned by a group of
hedge funds and private equity players. The Godrej Group also holds about 15% stake in the company. The nine-year-old firm has most of its backoffice operations out of India, while MedQuist’s 8,000 employees are primarily based out of the US.
The acquisition is one of the largest in the BPO industry after Firstsource Solutions’ acquisition of the US-based healthcare BPO MedAssist last year for $330 million. MedQuist’s services over 1,500 hospitals and large physician practices in the US.