One Equity in $1.1bn healthcare buyout

The firm’s purchase of listed healthcare services company MModal comes less than a week after the US Supreme Court upheld the healthcare reform law passed in 2010.

One Equity Partners, the private equity investment arm of JPMorgan Chase, will take NASDAQ-listed healthcare services company MModal private in a deal valued at roughly $1.1 billion.

MModal provides medical document processing and speech recognition services. The transaction values the company at a 19.3 percent premium compared to MModal’s average weighted closing price for the 180-day period ending 2 July.

SAC Private Capital Group, a private equity firm managed by Siris Capital Group founders Frank Baker, Peter Berger and Jeffrey Hendren, will sell its 31 percent stake in MModal. Bank of America Merrill Lynch and RBC Capital Markets will provide financing to One Equity Partners. The transaction is expected to close during the third quarter of 2012.

One Equity declined to comment on the transaction.

The investment comes less than a week after the US Supreme Court ruled to uphold The Patient Protection and Affordable Care Act, President Barack Obama’s healthcare reform bill passed into law in 2010. The decision helped remove widespread uncertainty surrounding the future of US healthcare that had stalled dealmaking in the sector.

US-based private equity firms invested significantly less in healthcare companies during the first six months of 2012 than the same period last year. A total of 20 deals worth a combined $997 million had transacted as of 30 June, compared to 40 deals worth $4.4 billion during the first six months of 2011, according to Dealogic. 

One Equity Partners invests heavily in manufacturing and technology businesses, but also invests in sectors including energy, media and food. The firm closed its North American-focused 2008 vintage buyout fund on $3 billion, and manages about $11 billion of assets.