SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 18, 1998
MEDQUIST INC.
----------------------
(Exact name of issuer as specified in charter)
New Jersey 0-19941 22-253 1298
------------- ------- -----------
(State or other (Commission (I.R.S. Employer
jurisdiction File Identification
of incorporation or Number) Number)
organization)
Five Greentree Centre
Suite 311
Marlton, New Jersey 08053
-------------------------
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (609) 596-8877
<PAGE>
Item 5. Other Events.
On September 18, 1998, the Registrant signed a definitive agreement to
acquire the MRC Group, Inc. ("MRC"). Closing is subject to regulatory and
shareholder approval of both companies and will be accounted for as a pooling of
interests.
The Registrant will issue approximately 8.5 million shares of its
common stock and will assume all MRC options. MRC shareholders will own
approximately 26.5% of the common stock of Registrant after closing. MRC
shareholders will receive .5163 of a share of Registrant's common stock for each
share of MRC common stock if the average Registrant's share price remains above
$16.28 during the pricing period. Should the average Registrant share price
during the pricing period be below $16.28, MRC shareholders will receive
proportionately more shares so that the dollar value of their consideration is
fixed below this share price.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
(1) Press Release dated September 18, 1998 is attached hereto as
Exhibit A.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEDQUIST INC.
Date: September 29, 1998 By: /s/ John M. Suender
-----------------------
Name: John M. Suender
Title: Vice President and
General Counsel
<PAGE>
Exhibit A
News Release
NASDAQ: MEDQ
FOR IMMEDIATE RELEASE
MEDQUIST SIGNS DEFINITIVE AGREEMENT TO ACQUIRE THE MRC GROUP
MARLTON, NJ, September 18,1998 -- MedQuist Inc. (Nasdaq:MEDQ) today
announced it has signed a definitive agreement to acquire The MRC Group, Inc., a
leading national provider of medical transcription services. The acquisition,
which is subject to regulatory approval and shareholder approval of both
companies, will be accounted for as a pooling of interests and is scheduled to
close during the fourth quarter of 1998.
MedQuist will issue approximately 8.5 million shares of common stock
and will assume employee options in connection with the acquisition. MRC
shareholders will own approximately 26.5% of the combined company. MRC
shareholders will receive 0.5163 of a share of MEDQ common stock for each share
of MRC common stock if the average MEDQ share price remains above $16.28 during
the pricing period. Should the average MEDQ share price during the pricing
period be below $16.28, MRC shareholders will receive proportionally more
shares so that the dollar value of their consideration is fixed below this share
price. The transaction is expected to be accretive to MedQuist's 1999 earnings.
The combined company will generate in excess of $260 million in current
revenues by serving more than 1,400 major health care customers through a
nationwide network of over 100 service centers and 6,000 medical
transcriptionists.
David A. Cohen, currently McdQuist's Chairman and Chief Executive
Officer, will become Chairman and Chief Executive Officer of the combined
company, and John A. Donohoe, currently MedQuist's President and Chief Operating
Officer, will become President and Chief Operating Officer of the combined
company. These two executives possess 54 years of combined experience in the
medical transcription industry. Edward L. Samek, Chairman and Chief Executive
Officer of MRC, will become Vice Chairman of the combined company, and Dennis R.
Byerly, President and Chief Operating Officer of MRC, will become President of
the Eastern Region of the combined company,
Mr. Cohen said, "We are extremely excited about this acquisition. MRC
is a great company with a strong management team and an excellent nationwide
service network. The combined company will offer a level of service and
technological expertise that is unparalleled in
<PAGE>
our industry. This acquisition will be excellent for employees, customers and
shareholders of both companies, and will position the combined company to play a
leading role in the ongoing development of the healthcare information services
industry during the twenty-first century."
Mr. Samek said, "We are very enthusiastic about the merger of our
companies. The consolidation of our complementary skills and resources will
create a new entity which will help improve the current service offerings of
both companies. In addition, we expect the merged company to provide enhanced
earning and career opportunities for employees of both companies, including our
very important skilled medical transcriptionists."
MedQuist was advised by Volpe Brown Whelan & Company, LLC and MRC was
advised by BT Alex. Brown Incorporated in connection with this transaction.
This press release contains forward-looking statements which involve
risks and uncertainties. The Company's actual results may differ materially from
those anticipated or implied in any such forward-looking statements as a result
of various risks, including, without limitation, failure to obtain regulatory or
shareholder approval for the transaction; failure to satisfy other conditions to
closing the transaction; failure of the transaction to be accretive to 1999
earnings; inability to integrate the diverse employee bases of the two
companies; inability to integrate the technology platforms of the two companies;
inability to sustain growth while integrating two companies; inability to
penetrate new markets; decreased demand for existing services and lack of demand
for future services.
Additional risks associated with the Company's business can be found in
its July 2, 1998 Registration Statement on form S-4, its Annual Report on Form
10-K and other periodic filings with the SEC.
Contact: John R. Emery, Chief Financial Officer, MedQuist Inc, (800) 355-6337,
Ext. 418
<PAGE>
