Health Care Deal News: Spotlight on E-Health- August 2012

Despite the flurry of transactions in late June and early July, M&A activity for the full month of July seemed to taper off. The one exception, however, was in the e-Health market, which seems to continue on at a near record-breaking pace of acquisitions.  In May there were eight announced e-Health transactions, increasing to 10 in June and then nine in July.  While most deals in this sector tend to be small, with many of these small acquisitions coming without a disclosed price, in July there was one very large deal.  One Equity Partners, the private investment arm of JP Morgan Chase & Co., with $10 billion under management, entered into an agreement to purchase M*Modal Inc. (NASDAQ: MODL), a leading provider of clinical transcription services, clinical documentation workflow solutions and advanced cloud-based Speech UnderstandingTM  technology.  One Equity is paying $14.00 per share, representing an 8.3% premium over the prior-day closing price.  Investment funds affiliated with S.A.C Private Capital Group, which controlled 31% of MODL’s shares outstanding, have agreed to tender their shares.  Macquarie Capital and RBC Capital Markets advised M*Modal, and Bank of America Merrill Lynch and RBC Capital Markets will be providing the financing to One Equity.

Only two of the other eight e-Health transactions came with prices, but both were under $5.0 million each.  These were involved in medical claims, transcription services, patient flow and bed management software, among other areas.  One interesting deal without a disclosed price involved a Massachusetts-based company, Care.com, Inc., purchasing a German counterpart that helps families find the care they need online in 15 European countries.  Care.com has been doing this in the U.S. market since 2006 and had already expanded into Canada and the UK, so this was a natural fit.  Care.com has 5 million members and the German company, Besser Betreut GmbH, has 2 million members. The acquisition closed in July but no financial details have been disclosed..........Want to read more? Click here for a free trial to The Health Care M&A Information Source and download the current issue today