Transcend Services Inc, a leading provider of clinical documentation services to the U.S. healthcare market, announced today that it is in negotiations to acquire DTS America, Inc. The transaction is expected to close in April 2011.

Founded in 1995 and headquartered in Nashville, Tennessee, DTS is a medical transcription company that serves approximately 30 hospitals plus a number of clinics and surgery centers in 13 states.

Susan McGrogan, Transcend's President and Chief Operating Officer stated: "DTS has an excellent reputation for customer service, as evidenced by their consistently high rankings in industry surveys. We are confident that we can integrate their operations, provide a great home for the DTS employees and continue to provide excellent service to their customers."

"In order to continue our ambitious growth plans, DTS needed to find a larger partner that both recognized the value of our employees and was committed to providing excellent customer service," said Andrew Miller, Jr., Chief Executive Officer of DTS America. "I believe Transcend is the best partner for our employees and clients and I am excited by the capabilities that each of us brings to the other."

Larry Gerdes, Transcend’s Chief Executive Officer added: "We are excited to have the opportunity to serve DTS’s customers and look forward to being able to offer them a greater array of flexible solutions to meet their clinical documentation needs. The tremendous job that our team has done on the integration of our October 2010 Heartland acquisition has allowed us to consider another acquisition this quickly."

DTS currently generates approximately $12 million of annual revenue, which is expected to increase Transcend’s annual revenue run rate (based on 4th quarter 2010 results) to approximately $124 million. Transcend intends to acquire DTS by the merger of DTS and a subsidiary of Transcend. The purchase price is expected to be $7.9 million in cash, plus an earn-out of up to $4.2 million payable in cash (if earned) in 2012. No debt will be assumed. The transaction is expected to have a nominal negative impact on 2nd quarter 2011 earnings per share ($0.00 - $0.01 per share) due to transaction costs and to be accretive to earnings per share starting in the third quarter of 2011.

The proposed terms are non-binding and may be modified prior to close. Closing is subject to certain pre-closing conditions, including completion of due diligence and negotiation and execution of a definitive purchase agreement.