Merge Healthcare (Milwaukee, Wisconsin) reported signing a definitive agreement to acquire etrials Worldwide (Morrisville, North Carolina), a provider of clinical trials software and services.
Merge said its offer was formally recognized as a superior proposal by etrials' board of directors pursuant to the terms of that company's previously announced definitive agreement with Bio-Imaging Technologies (Newtown, Pennsylvania) dated May 4 and amended on May 15 and May 19. The latter company has just been renamed BioClinica after the March acquisition of Phoenix Data Systems.
In connection with the termination of the Bio-Imaging merger agreement, etrials is obligated to pay to Bio-Imaging a termination fee of $500,000 and reimburse Bio-Imaging for reasonable out of pocket expenses up to $250,000 by today.
The Merge tender offer, which consists of a mix of $0.80 in cash and 0.3448 shares of Merge common stock for each share of etrials common stock, represents an aggregate value of $1.70 per share, calculated using the $2.610, 20-day volume-weighted average price of Merge common stock as of the close of market on May 26, last trading day before Merge made this offer to etrials.
The proposed acquisition by Merge is expected to be consummated through a tender offer for all of the outstanding shares of etrials stock. Stockholders representing approximately 33% of etrials' outstanding shares have already agreed to tender their shares. Pending customary closing conditions and the successful completion of the tender offer, it is expected that the transaction will close in the third quarter of 2009.
The merger agreement provides for Merge to acquire etrials in a two-step transaction. The first step will consist of a tender offer for all outstanding shares of etrials common stock. The tender offer will be followed by a merger in which any untendered outstanding shares of etrials common stock will be converted into the right to receive the same consideration per share offered in the tender offer.
Merge said the combined organization will provide clinical trial sponsors and contract research organizations "comprehensive and configurable solutions that include both critical imaging technologies and proven eClinical capabilities."
Justin Dearborn, CEO of Merge Healthcare, said"Our Merge OEM team has been a supplier of imaging solutions to pharmaceutical companies, CROs, the National Institutes of Health and to veterinary hospitals for years. We believe that there could be significant synergy from incorporating our imaging and data hosting solutions with etrials' broad portfolio of integrated eClinical solutions. etrials' experience in conducting global clinical trials also complements Merge's international expansion initiatives."
M. Denis Connaghan, CEO of etrials, said, "etrials welcomes this opportunity to become part of Merge Healthcare. It continues with our strategy to take the industry in a new direction . . . by bringing our customers access to additional capabilities that we believe increases the value of the important clinical trial development they perform."
He said the proposed deal "also gives the etrials organization a broader base of financial, product and development resources, and international relationships to continue the improvements that have been made and enable an expansion of the business."
Merge noted that clinical trials "are vital to the approval of new medical device and pharmaceutical treatments, and etrials has developed applications designed to accelerate the process, improve data quality and reduce overall trial costs."
Over the past 20 years, etrials has participated in more than 900 clinical trials involving more than 400,000 patients in some 70 countries through its electronic data capture (EDC), interactive voice and Web response (IVR/IWR), and electronic patient reported outcomes (ePRO) technology for clinical trial development and data management.
In the same timeframe, Merge has built software solutions that it said "improve the speed, cost and quality of medical imaging workflow."
The company said, "As clinical trials are becoming more dependent on imaging information, this acquisition allows Merge to capitalize on emerging trends and accelerate both companies' strategy to consistently deliver increased value to customers in the clinical trial market."
etrials' Dearborn said, "This acquisition enables both companies to leverage the other's customer relationships, from pharmaceutical companies, CROs, medical device manufacturers and veterinary hospitals; creating cross-sell and up-sell opportunities." The compnies noted that etrials' offerings have no overlap with Merge's products.
Merge Healthcare is a provider of software solutions that automate healthcare data and diagnostic workflow to build a better electronic record of the patient experience.
Headquartered near North Carolina's Research Triangle Park, etrials Worldwide is a provider of eClinical software and services to pharmaceutical, medical device biotechnology and pharmaceutical companies, as well as CROs.