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Spheris Reaches Agreement To Be Acquired By MedQuist and CBay

FRANKLIN, Tenn., Feb. 3 /PRNewswire/ -- Spheris, a leading global provider of clinical documentation technology and services, today announced that it has entered into an agreement under which MedQuist Inc. and CBay Inc., portfolio companies of CBaySystems Holdings Ltd. and leading providers of medical transcription software and services, have agreed to purchase substantially all of Spheris' assets pursuant to a transaction that is to be implemented under Section 363 of the United States Bankruptcy Code.  In order to commence the sale process, Spheris and certain of its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Court").  The Company expects its operations to continue as usual during the restructuring process.  Spheris India, a subsidiary of the Company, will be part of the prospective transaction but will not file for bankruptcy.

Robert Butler, Chief Restructuring Officer of Spheris, stated, "Throughout the past year, Spheris has taken steps to strengthen its operations and customer service, and these initiatives are achieving solid results.  Spheris has also been engaged in constructive discussions with certain key constituents of the Company to identify ways to enhance financial flexibility for our operations.  We expect customers will continue to receive high-performing services through a company with a stronger capital structure."

Tony James, Chief Operating Officer of Spheris, added, "Spheris is committed to maintaining the highest levels of customer satisfaction and we will remain focused on our operations throughout this process.  We expect the transition to be seamless for our customers and we appreciate their continued support.  I would also like to thank the dedicated employees of Spheris for their commitment to the Company and for working hard to provide the outstanding service quality and quick turnaround times that our customers expect."

Prior to the Court approval of the MedQuist/CBay agreement, there will be a court-supervised auction process to facilitate competitive bidding by other qualified bidders.  The auction process is intended to achieve the highest price possible for the assets and provide the Company with an efficient way to address its capital structure without disrupting operations.  The bidding procedures, if approved, would require interested parties to submit binding offers to acquire some or all of the Company's assets within approximately 30 days of Court approval of the bid procedures.  If qualified bids are submitted, an auction would be held a few days prior to the sale hearing.  A Court hearing approving the sale to the winning bidder would be held soon after the conclusion of the auction, followed by a final closing.  If the MedQuist/CBay agreement is approved and the conditions thereunder satisfied, Spheris expects that the transaction will be completed in the first half of 2010.    

In addition, a syndicate of lenders has confirmed that they will enter into a Senior Secured Super-Priority Debtor-in-Possession Financing Agreement among the debtors under the bankruptcy case, with Ableco, L.L.C., as Collateral Agent, and Cratos Capital Management LLC, as Administrative Agent, to provide up to $15 million in Debtor-in-Possession financing upon the terms and conditions set forth therein, including entry of an order of the Court approving the financing.  The financing facility will be used to fund ongoing operations and repay outstanding revolving credit loans under its pre-petition credit facility as of the filing date.

In conjunction with today's filing, the Company also filed a number of customary motions to continue to support its employees, customers and suppliers during the financial restructuring process and to facilitate a seamless transition to new ownership.  As part of these motions, the Company has asked the Court for additional authorizations, including permission to continue paying employee wages, salaries and health benefits without interruption.

Additional information is available through the Company's website,  Access to Court documents and other general information about Chapter 11 cases is available at

Forward Looking Statements

This press release contains certain forward looking statements about our financial condition, operations, business strategies, objectives, future business and financing requirements. It also contains other forward looking statements about our expectations, beliefs, future plans, anticipated developments and other matters that are not historical facts concerning our business, operations and financial performance and condition. These statements are based upon management's current expectations and beliefs and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward looking statements. These risks and uncertainties include market conditions and other factors beyond the Spheris' control.  Spheris can provide no assurance, therefore, that the transactions will close.

    Lisa DeMoss Director, Marketing and Communications  
    (615) 261-1716           
    Andy Brimmer / Andrew Siegel / Nicholas Lamplough
    Joele Frank, Wilkinson Brimmer Katcher
    (212) 355-4449

SOURCE Spheris



SOURCE Spheris
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