3M to acquire M*Modal technology business for $1B
3M announced that it has entered into a definitive agreement to acquire the technology business of M*Modal, for a total enterprise value of $1B. M*Modal is a healthcare technology provider of cloud-based, conversational artificial intelligence, or AI-powered, systems that help physicians capture the patient narrative. 3M will maintain a strategic business relationship with M*Modal's remaining transcription, scribing and coding services business, which is not part of this transaction, to help ensure continuity and strong customer support. Annual revenue of M*Modal's technology business is estimated to be approximately $200M. On a GAAP reported basis, 3M estimates the acquisition to be 10c dilutive to earnings in the first 12 months following completion of the transaction. Excluding purchase accounting adjustments and anticipated one-time expenses related to the transaction and integration, 3M estimates the acquisition to be neutral to earnings over the same period. The effective enterprise value multiple is approximately 10 times estimated annual adjusted EBITDA for the first 12 months following completion of the transaction, including expected run rate synergies. The transaction is expected to close in the first half of 2019, subject to customary closing conditions and regulatory approvals. Approximately 750 employees supporting the technology business of M*Modal are expected to join 3M upon completion of the transaction.