Apr 9 2010
TRANSCEND SERVICES, INC. (NASDAQ: TRCR), the third largest provider of medical transcription services to the U.S. healthcare market, announced today that it has submitted a bid to acquire substantially all of the assets of Nashville, Tennessee-based Spheris, Inc. and the stock of its subsidiary for $78.25 million.
As a result of its inability to service its debt, Spheris filed for Chapter 11 bankruptcy protection on February 3, 2010, after entering into a "stalking horse" purchase agreement with MedQuist Inc. and CBay Inc. in a proposed sale under Section 363 of the United States Bankruptcy Code. The United States Bankruptcy Court for the District of Delaware established a bid process whereby interested parties, including Transcend, submitted qualified bids on April 8, 2010. All qualified bidders will be able to participate in an auction of substantially all of the assets of Spheris and the stock of its subsidiary on April 13, 2010. If Transcend is the successful bidder in the auction, it anticipates that the ensuing transaction will close by mid- to late-April.
A portion of the financing for the potential transaction is expected to come from a new four-year, $65 million senior secured credit facility. As required by the bid process, Transcend has obtained a commitment letter for the credit facility from its bank. Transcend expects other parties, including the stalking horse, to participate in the auction and the ultimate outcome is uncertain at this time.