Finalization of Fonix acquisition gives L&H resources to offer enterprise wide health care reporting solutions

Ieper 02 September 1999Lernout & Hauspie (L&H) has completed its acquisition of the Fonix Healthcare Solutions Group, formerly Articulate Systems. The acquisition helps L&H expand its medical market presence by giving it a comprehensive suite of speech solutions for the health care market. By combining Fonix Healthcare Solutions Group's offerings with its existing departmental-oriented medical dictation products, L&H is well positioned to seize leadership in the speech-enabled health care-reporting arena.

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The agreement adds the Fonix Healthcare Solutions Group's award-winning PowerScribe Radiology and Emergency Medicine products, its blue-chip customer base and both its sales & marketing, and client services and development staff to L&H's Healthcare Solutions Group. Approximately 40 employees from the Fonix division, including sixteen from research and development, are expected to become part of the L&H Healthcare Solutions Group in Burlington. Ivan Mimica, founder of Articulate Systems, will take on the role as group vice president of Healthcare Solutions at L&H, in order to report to Anatoly Tikhman, the president of L&H's Speech and Language Applications Division.

The $6 billion medical transcription market represents one of the largest opportunities for speech technology in the industry today, as stated by Gaston Bastiaens, president and CEO of L&H. The acquisition of the Fonix Healthcare division not only gives L&H a comprehensive group of medical reporting solutions today, but a platform for delivering an enterprise-wide solution that can address this multi-billion dollar market opportunity, he added. There is significant synergy between the two companies' health care offerings. PowerScribe and the L&H Clinical Reporter products use different, but complementary approaches to reduce medical transcription costs and improve productivity for medical market reporting and billing practices.

L&H believes that by combining the two product approaches and applying its localization expertise, it will be able to develop a solution that addresses the needs of the total health care enterprise worldwide. The combination of the company's Clinical Reporter, Voice Xpress for Medicine and the PowerScribe product family provides the most complete family of dictation and speech recognition offerings in the entire medical industry, according to T. Ivan Mimica, who is Group Vice President of L&H's healthcare solutions group. The breadth of solutions resulting from this acquisition might help reduce transcription costs as well as address clinicians' needs at the individual and departmental level, as he believes.

Fonix Corporation, based in Salt Lake City, Utah with offices in Boston, MA and Cupertino, California, provides solutions to make human interaction with computers and other intelligence appliances simpler and much more convenient. The company's suite of products and services, including speech recognition, handwriting recognition and text-to-speech technology, provide natural, intuitive solutions that allow people and their technological tools to speak to and interact with each other in human terms. Fonix technology produces and enhances products offered by Fonix and its OEM, i.e. Original Equipment Manufacturers partners. It is equally included in computer and Internet based systems and devices for consumer, professional as well as industrial markets.

L&H purchased the Fonix division for $24 million in cash, with an earn-out of up to $4 million spread over two years based upon performance. L&H expects the transaction to be slightly dilutive for 1999 and accretive in the year 2000. L&H will continue to market and support both its L&H Clinical Reporter and the PowerScribe family of products. The Fonix HealthCare Solutions Group customers include Emory University Hospital, the Duke University Medical Center, Cornell Medical Center, known as the New York Presbyterian Hospital, Shands Hospital at the University of Florida and many others. For more details on the Fonix acquisition, we refer to the VMW article L&H to acquire Fonix' Articulate Systems Division and launch medical market's first continuous speech dictation and reporting solution in the June 1999 issue.


Leslie Versweyveld

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