Medical Records Company Purchased

ExamWorks Group, Inc. (NYSE: EXAM), the nation's leading provider of independent medical examinations (IMEs), peer reviews, bill reviews and related services, announced today that the Company has entered into a definitive agreement to acquire all of the outstanding stock of MES Group, Inc. (MES). MES, based in The Woodlands, Texas, provides independent medical examinations, peer reviews and utilization reviews to the automotive, disability, liability and workers' compensation markets. The acquisition excludes MES' Veterans Evaluation Services business. For 2010, the IME and peer review divisions of MES are expected to have approximately $129 million in annual revenue. ExamWorks would have had pro forma revenue of approximately $270 million and estimated pro forma adjusted EBITDA of approximately $51.8 million for the nine months ended September 30, 2010 if the MES acquisition and all other acquisitions by ExamWorks during 2010 occurred on January 1, 2010. Excluding MES, ExamWorks had pro forma revenue and adjusted EBITDA of $170.4 million and $34.2 million, respectively, for the nine months ended September 30, 2010. The transaction which is expected to close in the first quarter of 2011 is subject to customary closing conditions and regulatory approval.
Under the terms of the agreement, the purchase price is approximately $210 million and consists of $175 million of cash consideration, 1,424,501 shares of ExamWorks stock with a contractual value of approximately $25 million and up to $10 million of assumed debt. ExamWorks intends to finance the cash portion of the transaction using cash on hand and the Company's senior revolving credit facility. We expect the acquisition to be accretive to EBITDA and cash earnings.
Commenting on today's announcement, Richard E. Perlman, Executive Chairman of ExamWorks, said: "This combination will deliver greater value for our clients, physicians, employees and shareholders. MES has demonstrated strong and consistent organic revenue growth over its 33 year history. The company's medical panel and national account program complement ExamWorks existing infrastructure. ExamWorks' national network of local offices and service professionals are positioned to serve these national accounts by continuing to provide enhancements to the industry's highest quality IME services and increasing the volume of IME-related referrals to our physicians. The development of national accounts is a key strategic objective for ExamWorks. Coupled with our similar cultures and unique global opportunities, we think this is the perfect opportunity for everyone."
"This transaction is a winning combination for all stakeholders," said George C. Turek, CEO and founder of MES Group. "Our clients can anticipate receiving the highest quality IME services, continuity of relationships and access to evidence-based services and market specific analytics to assist in the management of health cost containment. We have developed and retained the industry's most productive and knowledgeable professionals. ExamWorks management expertise, international footprint and diversified service portfolio will provide exciting opportunities as the industry and professionals enter the next phase of growth."
William Blair & Company and Raymond James were the respective financial advisors to ExamWorks and MES on the transaction.