ATLANTA--(BUSINESS WIRE)-- TRANSCEND SERVICES, INC. (NASDAQ: TRCR), a leading provider of clinical documentation services to the U.S. healthcare market, announced today that it has acquired Spryance, Inc. and its subsidiaries (d.b.a. “Heartland”) on October 21, 2010.
Founded in 1997, Heartland Information Services was acquired in 2006 by Spryance, Inc. The combined company has used the Heartland name since the acquisition. Headquartered in Toledo, Ohio, Heartland serves approximately 55 hospitals plus several clinics and surgery centers nationwide and has a strong relationship with Hospital Corporation of America (HCA). With centers in Bangalore, Chennai and Delhi, the company has over 1,500 medical transcription and quality assurance specialists in India and has historically provided most of its services using offshore resources.
Sue McGrogan, Transcend's President and Chief Operating Officer stated: “With the combination of Heartland and Transcend, we will arrive at what we consider to be an optimal blend of domestic and offshore capacity, with approximately 70% of our work completed in the U.S. and 30% in India. This gives us additional capacity and allows us to provide faster turnaround times by allocating work more efficiently, especially during the night in the U.S. This is why we believe a blended approach is the best solution for many of our customers. We have a wonderful, industry-leading domestic workforce which is a key to our success and we plan to retain and expand that workforce as we grow.”
Larry Gerdes, Transcend’s Chief Executive Officer added: “We are excited to assume the privilege and responsibility of serving Heartland’s customers. As we integrate our two companies, we look forward to offering our Heartland customers a greater array of flexible solutions to meet their clinical documentation needs. If some Heartland customers wish to use a blend of domestic and offshore resources, we will make that option available to them. For those customers who prefer to manage their own transcriptionists, we will offer our new EncoreTM platform. For those who desire to reduce transcription costs by having their physicians edit their own documents, we will provide our front-end speech solution. And for those who want to take advantage of the structured, XML-tagged data in our documents, we will offer a variety of data mining, alert and query solutions.”
Heartland currently generates over $18 million of annual revenue, bringing Transcend’s annual revenue run rate over the $100 million threshold. Transcend acquired Heartland by merging a Transcend subsidiary into Spryance, Inc. The purchase price was approximately $6.5 million in cash, including the pay off of approximately $1.0 million of Heartland debt. In addition to the purchase price, Transcend assumed approximately $1.0 million of Heartland’s transaction-related liabilities, net of U.S. cash acquired. The transaction is expected to have a nominal impact on 4th quarter 2010 earnings per share due to Transcend’s transaction costs and to be accretive to earnings per share in 2011.
About Transcend Services, Inc.
Transcend Services is a leading provider of clinical documentation solutions for healthcare organizations. The company’s high-quality transcription services – along with leading data extraction and reporting tools – provide critical data needed to document patient encounters and help drive clinical decision making. Transcend provides clients with exceptional quality, turnaround time and service so that they can focus on what matters most – their patients. For more information, visit www.transcendservices.com.
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