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, toldInformationWeek 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

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