CHECK ABOUT THE 9TH PARAGRAPH DOWN...THIS IS AN ARTICLE I FOUND A WHILE BACK...PERHAPS EARLY 2005...
Spheris reaches deal for rival Avicis/HealthScribe
By JEANNE ANNE NAUJECK
Staff Writer
Franklin-based Spheris, the nation's second-biggest medical transcription company, has acquired its No. 3 rival, Avicis/HealthScribe, company officials said yesterday.
The combined companies will bring in $200 million in annual revenue, Spheris President and CEO Steven Simpson estimated yesterday.
The name will remain Spheris, and headquarters will stay in Franklin. Avicis/HealthScribe is based in Sterling, Va., near Washington.
The deal brings Spheris' total employees to about 5,500, 80% of them medical record-keepers. The deal also gives Spheris a large work force in India.
Simpson said there would be ''absolutely no layoffs'' among the medical record-keeping work force, although some back-office functions might be combined.
The company processes and updates medical records and patient files to aid in accurate billing and patient care.
Simpson would not say how much Spheris paid for Avicis/HealthScribe but said the purchase was facilitated by last month's recapitalization in which Spheris was acquired by investors Warburg Pincus and Soros Private Equity from Parthenon Capital.
''This became a reality once the recap was completed,'' he said.
Simpson said the investors and the company were interested in taking Spheris public at some point, but the immediate goal is to go after market leader MedQuist, which has about 11,500 employees and $500 million in annual revenues.
''This acquisition really complements the company and positions us to go after No. 1,'' Simpson said.
MedQuist may be vulnerable. In July an independent review found the New Jersey-based company had engaged in billing practices that led its board of directors to recommend broad reforms and led to the resignation of its chief financial and legal officers.
And in October, Medquist said financial statements from 2002-2004 were no longer reliable.
Since then, the company has been slapped with three separate class-action lawsuits.
One is on behalf of hospital and medical center clients who claim MedQuist overcharged them for transcription services. Another is on behalf of current and former medical transcriptionists who allege they were wrongfully underpaid.
The third was filed on behalf of shareholders who allege MedQuist issued ''false and misleading statements to the market'' to inflate the company's stock price.
Last week, the company's executive vice president and chief operating officer said he would resign as well.
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