HHS plans to augment Emageon’s technologies, such as RadSuite, as the PACS replacement cycle begins in early 2009. Image Source: Radiological Society of North America

Health Systems Solutions (HHS) has signed a definitive agreement to acquire 100 percent of Emageon’s stock, in an all cash transaction of approximately $62 million.

The agreement was unanimously approved by each company’s boards of directors, as well as Emageon’s Strategic Alternatives Committee. In July, the Birmingham, Ala.-based company reported that its committee was evaluating strategic options, leading the industry to question the possibility of a sale.

Each company will continue to operate independently until the transaction closes. The merger will result in a company of approximately 400 employees, HHS said.

Current Emageon management will continue to operate the business as they have, but as a part of the HSS group of companies.  Sales and support functions of both organizations will continue as usual as well, the companies said.

The consideration for the purchase is being financed by $85 million provided by Stanford International Bank Ltd, a member of the Stanford Financial Group and HSS’ principal shareholder. The additional funds will be used for working capital and to fund growth initiatives, according to HHS.  

The financing will take the form of 6 percent Convertible Secured Debentures due in 2013, with warrants to purchase up to 9 million shares of common stock.