Merge eFilm, Cedara to become one

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RIS/PACS vendor Merge eFilm and medical imaging software company Cedara Software Corp. this week announced a definitive agreement to merge in an all-stock transaction. The companies said the merged entity could produce combined revenue of $100 million.
   
Concurrent with the agreement, Merge eFilm said it will issue either 0.587 Merge eFilm common shares, or 0.587 shares of a newly created class of Canadian exchangeable shares for each Cedara common share. Based on the 20-day volume weighted average price of Merge eFilm stock for the period ending Jan. 14, the transaction is valued at $12  (U.S.) for each common share of Cedara, representing a 17.5 percent premium to Cedara's 20-day volume weighted average price.    
   
The merged company will offer a portfolio of comprehensive image and information management systems that meets the current and emerging needs of medical imaging OEM and end user customers. In addition, the companies want to expand their systems portfolio in RIS/PACS offerings beyond radiology.
   
"Our combined strengths will allow us to accelerate the development and deployment of new imaging products and services for both the OEM markets and our expanding interest in RIS/PACS offerings beyond radiology," said Richard Linden, president and CEO of Merge eFilm. "Together, we create a powerful combination of industry leading product innovation, sales and marketing distribution, valued professional services, strengthened international market coverage, and enhanced access to new markets. For example, we are well positioned to leverage the market leading innovation of OEM technologies for clinical specialties such as orthopedics, cardiology, gastroenterology, and mammography into full workflow solutions."
   
The corporate headquarters for the newly combined company will be in Milwaukee, Wis. Linden will serve as president and CEO of the newly formed company. Abe Schwartz, Cedara's president and CEO, will continue his involvement with the company, including serving as a member of its Board of Directors.
   
In October, Cedara signed a $48 million agreement to acquire RIS/PACS and teleradiology vendor eMed Technologies. Merge eFilm recently announced plans to acquire advanced visualization software vendor AccuImage Diagnostics Corp. of San Francisco, Calif. The all cash transaction is valued at approximately $6 million and is expected to close first quarter of FY05.