JPMorgan Chase unit to acquire M-Modal in $1.1 billion transaction

In what is by far the biggest venture capital deal in health IT this year, One Equity Parters, the equity investment branch of JPMorgan Chase, has agreed to take M-Modal (NASDAQ:MODL) private, buying all of its shares for $1.1 billion in cash.

M-Modal, which offers a cloud-based voice recognition program that uses natural language processing (NLP), recently announced a new product that it said could convert doctors' dictation into discrete data in electronic health records. The "speech-to-text platform," called Fluency, is a refinement of its earlier NLP software.

Two EHR vendors, Allscripts and Greenway, have announced they will use M-Modal's platform to make it easier for physicians to document findings in their EHRs. Allscripts has already integrated the application into its Sunrise acute-care EHR. Another vendor, eClinicalWorks, told InformationWeek Healthcare that it is developing a new EHR feature that does the same thing, using Nuance's NLP engine.

Another area where NLP is gaining ground is in computer-assisted coding (CAC), used in a growing number of hospitals. M-Modal recently signed a licensing agreement with 3M Health Information Systems that allows 3M to interface M-Modal's CAC solution with the 3M Coding and Reimbursement System.

Medquist, a medical transcription company based in Franklin, Tenn., purchased M-Modal last August for $130 million and assumed M-Modal's name. The company began trading its stock on NASDAQ in January.

Under terms of the agreement with One Equity Partners, that firm will make a tender offer for all shares of M-Modal no later than July 17. The M-Modal board has unanimously recommended that all shareholders accept the offer.

In a statement, the JPMorgan Chase subsidiary explained why it's buying the company. "M-Modal 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 healthcare," said Dick Cashin, managing partner of One Equity Partners.

To learn more:
- here's the announcement about the acquisition
- read the InformationWeek Healthcare article