About Transcend Services, Inc.

Transcend believes that accurate, reliable and timely transcription creates the foundation for the patient medical record. To this end, the Company has created Internet-based, speech-recognition enabled, voice-to-text systems that allow its skilled medical language specialists to securely and quickly produce the highest quality medical documents. The Company's wide range of transcription and editing services encompass everything needed to securely receive, type, edit, format and distribute electronic copies of physician-dictated medical documents, from overflow projects to complete transcription outsourcing. For more information, visit http://www.transcendservices.com.

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, Section 27A of the Securities Act of 1933, as amended and pursuant to the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may relate to financial results and plans for future business activities, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are competitive pressures, loss of significant customers, the mix of revenue, changes in pricing policies, delays in revenue recognition, lower-than-expected demand for the Company's products and services, business conditions in the integrated health care delivery network market, difficulties in implementing our offshore outsourcing objectives, general economic conditions, and the risk factors detailed from time to time in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such speak only as of the date made.

SOURCE: Transcend Services, Inc.

Transcend Services, Inc. 
Larry Gerdes, 678-808-0600 (CEO) 
larry.gerdes@trcr.com 
or 
Lance Cornell, 678-808-0600 (CFO) 
lance.cornell@trcr.com

Transcend has entered into a definitive agreement to acquire Medical Dictation Services for a consideration of $16.20 million.

The total consideration comprises $10.2 million in cash payable at closing, $2 million in cash payable after receipt of interim financial statements and audited financial statements for the last two fiscal years, $2 million note payable to the selling shareholder due one year after closing, and $2 million through the issue of 119,940 shares of Transcend common stock.

The initial cash portion of the purchase price is expected to be funded using a combination of cash on hand and up to $7 million in bank term debt.

The transaction is expected to close by August 31, 2009.

KPMG Corporate Finance, LLC and Suender M&A Advisors, LLC are acting as financial advisors to Medical Dictation Services.

Deal Type    Acquisition
Sub-Category Majority Acquisition
Deal Status  Completed: 2009-08-31

Deal Participants

Target (Company)   Medical Dictation Services, Inc.
Acquirer (Company) Transcend Services, Inc.

Deal Rationale

The acquisition will expand Transcend's national footprint with Medical Dictation Services' strong presence in the mid-Atlantic region.

Expected next investor conference call information:
Conference Call Date: 10/28/2009
Conference Call Time (ET): 11:00 AM
Conference Call URL: http://www.transcendservices.com/investors.asp

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