CMS Cameron McKenna advises CBaySystems Holdings Limited on MedQuist Inc. acquisition
22.07.2008
CMS Cameron McKenna LLP has advised CBaySystems Holdings Limited (“CBay”), a company traded on AIM, on UK law matters in respect of CBay’s proposed acquisition of approximately 69.5 per cent of the outstanding common stock of MedQuist Inc., from Koninklijke Philips Electronics N.V. (“KPE”) and CBay's proposed admission of the enlarged group to AIM.
It was announced on 22 May 2008 that affiliates of SAC PCG and Lehman Brothers Inc. had conditionally agreed to invest US$123,000,000 in CBay (the “Subscription”) to be used to finance the proposed purchase by CBay Inc., a subsidiary of CBay, from KPE of its approximately 69.5 per cent shareholding in MedQuist Inc (the “Acquisition”). The Subscription and Acquisition are conditional on, among other things, the passing of a resolution by shareholders of CBay at an Extraordinary General Meeting of CBay, which is to be held on 5 August 2008.
The aggregate consideration for the Acquisition is US$286,935,946, of which US$98,000,000 is payable in cash, US$90,935,000 is to be satisfied by the issue of a convertible note convertible at KPE's option 90 days after issuance into Ordinary Shares in CBay, and US$98,000,946 by the issue of a 90-day note, each subject to certain adjustments. On 14 July 2008, MedQuist Inc.'s board of directors declared a cash dividend of US$2.75 per share to the shareholders on the register of members of MedQuist Inc. on 25 July 2008, payable on 4 August 2008. If the dividend is paid, the principal amount of the 90-day note will be reduced by approximately US$71.7 million, subject to certain adjustments.
The Acquisition constitutes a "reverse takeover" under the AIM Rules because of the size of MedQuist Inc. compared to that of CBay and therefore is conditional (inter alia) upon approval of the shareholders of CBay, which is being sought at the EGM. An admission document containing the notice of the EGM was published on 19 July 2008. Irrevocable undertakings have been received from shareholders of CBay representing approximately 82.7 per cent of the existing issued share capital of CBay to vote in favour of the resolution.
It is expected that completion of the Acquisition, the Subscription and admission of the enlarged group to AIM will take place on 6 August 2008, following the approval of the shareholders at the EGM.
The CMS Cameron McKenna team included corporate partner Peter Smith and senior associate Helen Johnson.
The CBay Group was established in 1998 in Annapolis, Maryland, to provide medical transcription services to the US healthcare industry. The CBay Group was founded to provide technology-enabled healthcare business process outsourcing which is carried out mostly in India
MedQuist is one of the largest medical transcription service organizations in the world, and is a leader in technology enabled clinical documentation workflow. MedQuist services health systems, hospitals and large group medical practices throughout the US, and employs approximately 6,000 skilled medical transcriptionists, making it the largest employer of medical transcriptionists in the US.
Simpson Thacher & Bartlett LLP is legal adviser to CBay on the Acquisition and Jones Day is legal adviser to CBay on admission as to certain matters of US securities law.
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