Under terms of the proposed deal, QHR will pay either four cents per share for each of Open EC's more than 61.5 million shares or exchange one QHR share for every 12 Open EC shares, subject to a 12-month hold on the shares.
Based on the cash offer, the deal represents a premium of about 20 per cent based on Open EC's most recent 20-day weighted average share price, QHR said.
Open EC Technologies provides software solutions and transaction processing services for doctors, hospitals, health plans, insurance brokers and state governments.
Depending on the choices made by OEC shareholders, the cash component of the transaction could range from $800,000 to about $1.5 million for the purchase of OEC shares, with the remaining portion (including all officers, directors and insiders of OEC) taking the share conversion option.
Officers, directors and insiders of OEC own some 20 million OEC shares or about 32 per cent of the company.
In addition, the arrangement will provide for the repayment of OEC's existing secured debt and a commitment to provide working capital of $500,000 as needed to the OEC business unit for fiscal year 2013.
In addition, QHR has agreed to provide a secured bridge loan to OEC in the amount of $250,000.
"The transaction marks QHR's entry into the U.S. health-care market with a partner that has a solid and growing customer base," the company said in a statement.
QHR, operates in two segments, with its electronic medical records division providing computer-based medical records for family physicians, medical specialists and surgeons, as well as administrative modules for billing and patient scheduling.
Its enterprise management software division specializes in workforce management software, including integrated payroll, staff scheduling and human resource software aimed specifically at the health-care, social services and public safety markets.
The transaction is expected to close by October.