JPMorgan Chase & Co.'s private investment arm One Equity Partners has agreed to acquire MModal, a developer of clinical transcription software, for approximately $1.1 billion, or $14 per share.
In addition to media properties such as TV Guide, One Equity Partners invests in health care vendors, including Wright Medical Group, an orthopedic implant company, and Apollo Health Street, a business process outsourcer. In technology, One Equity Partners has stakes in IP infrastructure and application provider Genband and network security firm Mandiant.
Announced on July 2, the deal is expected to close during the third quarter of 2012.
An MModal spokesman declined to comment on the acquisition beyond the company's release.
"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," Vern Davenport, chairman and CEO of MModal, said in a statement.
The JPMorgan Chase unit will purchase all outstanding shares of MModal.
MModal offers a cloud-based platform called Speech Understanding, which uses natural-language processing to analyze a doctor's speech and converts it into text.
"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," said Davenport.
On June 12, MModal unveiled Catalyst, a suite of software that comprises Catalyst for Quality and Catalyst for Radiology. Catalyst for Quality uses speech recognition to allow health care executives to improve the quality of documentation to satisfy federal mandates on meaningful use of electronic health records. Catalyst for Radiology allows radiologists to find clinical information within radiology documents.
"MModal presents a unique opportunity to acquire a market leader in clinical documentation at a time when the company has successfully released its new generation of speech understanding solutions for health care," Dick Cashin, managing partner of One Equity Partners, said in a statement.
The cloud capabilities of MModal's Speech Understanding platform could help accelerate analytics for clinical language understanding of big data, said Shahid Shah, CEO of IT consulting firm Netspective Communications and author of the Healthcare IT Guy blog.
"In general, the acquisition is a good thing because it gives MModal access to more capital," Shah told eWEEK in an email.
With the "Obamacare" legislation, the Patient Protection and Affordable Care Act upheld by the Supreme Court on June 28, the health care industry is moving to more of a payment model based on outcomes rather than fee for service. As a result, the speech-to-text documentation capabilities of software like MModal's to comb medical data will be important, according to Shah.
"If the proper attention is provided and enough money is pumped into MModal, it could really help shake up the speech-recognition market in health care at a time when fee for service is switching to outcomes-driven and performance-focused care," said Shah. "When dealing with performance and outcomes-based care, medical data matters more than it does in the fee for service model."
In addition to Catalyst, MModal introduced Fluency, a cloud-based speech-to-text platform, on May 9. Fluency is a set of applications that allow doctors to dictate narratives about a patient's condition and flow the data into EHRs.
Fluency can even pick up accents, dialects and cadence in a doctor's speech, according to MModal.