Amicas agrees to Merge purchase for $248M
The Chicago-based Thoma Bravo had reached an agreement to buy Amicas for $5.35 per share late last year, but Merge surpassed that offer with an unsolicited bid in late February. While the Boston-based Amicas' executives had originally expressed skepticism about Merge’s ability to complete the transaction, after reviewing an updated Merge proposal, they determined it was “superior” to that of Thoma Bravo.
Before it can enter into an acquisition with Merge, Amicas must first terminate the agreement with Thoma Bravo, which will require Amicas to pay Thoma Bravo an $8.6 million termination fee--half of which will be reimbursed by Merge.
“Throughout the process, Amicas' board has been focused on maximizing stockholder value and our agreement with Merge Healthcare demonstrates that commitment,” said Stephen Kahane, MD, president, CEO and chairman of Amicas. “We are proud of what we have built at Amicas, including the solutions we deliver, the intimate partnerships we have with our customers and the excellent reputation we have in the marketplace. This transaction with Merge validates the strength of the business we have built. We look forward to working with Merge to complete the transaction as expeditiously as possible."
Merge CIO Justin Dearborn said the combined company’s suite of health IT technologies “will encompass a broad range of medical and biopharmaceutical imaging solutions to meet the needs of today's medical imaging providers. In addition, Merge's OEM [original equipment manufacturer] and CAD [computer-aided detection] technologies, international and eCommerce distribution channels and additional market segments such as clinical trials provide new opportunities for Amicas products and customers.”
The Milwaukee-based Merge has obtained $240 million of debt and equity commitments to finance the transaction. Merge and Morgan Stanley Senior Funding, Inc. have executed a definitive commitment letter for $200 million of debt financing. Merge also has $40 million of equity purchase commitments from private investors for the issuance of Merge common stock and a new class of Merge non-voting preferred stock.
The companies expect the transaction will be completed in two stages. The first step will be a cash tender offer for all of Amicas' outstanding common stock, and the tender offer is expected to begin in about two weeks. The second step will be a merger pursuant to which any untendered shares of Amicas common stock will be converted into the right to receive the same $6.05 per share cash price.
Amicas and Merge expect to close the transaction in the second quarter of 2010.