A Medical Device Daily
Nanogen (San Diego), a developer of in vitro diagnostic products, said it has received permission to investigate alternatives to its previously reported merger with the Elitech Group (Paris).
Nanogen reported in August that it had agreed to combine its business with Elitech, a French diagnostics company, in an all-stock deal. The merger was expected to close by the end of 1Q09 (Medical Device Daily, Aug. 18, 2008).
Nanogen said Elitech agreed to waive the restrictions in the agreement related to Nanogen's right to investigate alternatives because both companies believe it is unlikely that closing conditions will be met by March 31.
In consideration of the waiver, Nanogen agreed to waive Elitech's obligations to prepare the audited and unaudited financial statements to be included in Nanogen's SEC filings for stockholder approval. Instead, Elitech agrees to use reasonable commercial efforts to prepare such financial statements and may suspend or terminate such preparation if it deems it commercially reasonable to do so.
In addition to working to complete the merger with Elitech, Nanogen said it would also actively explore alternatives, including but not limited to a restructured transaction with Elitech, a transaction with a different entity, a sale of assets or a significant equity infusion.
Nanogen said that both companies believe it is unlikely that Nanogen will have obtained stockholder approval or that, given the current financial market conditions, the companies will have arranged for working capital financing by March 31, both of which are closing conditions to the merger. If the merger is not closed by March 31, each of the companies has the right to terminate the agreement.
In order for Nanogen to solicit the approval of its stockholders, Elitech must prepare and provide to Nanogen for inclusion in its SEC filings certain financial statements. Elitech has not completed the required financial statements and the timing for completing these financial statements is uncertain, Nanogen said.
In addition, under the terms of convertible notes issued by Nanogen in 2007 and 2008, the failure of Nanogen to commence solicitation of stockholder approval by Feb. 1 will reinstate Nanogen's obligations to make certain interest and redemption payments, which are currently deferred.
In other dealmaking activity:
•AIM Health Group (Toronto) and Med-Emerg International (Mississauga, Ontario), reported completing their previously disclosed all-stock merger transaction. The combined company is expected to have annual revenues in excess of C$55 million and will be one of the largest Canadian health services providers, offering one of the most comprehensive packages of medical health services in Canada, according to the companies. It is anticipated that the synergies generated from this business combination will result in significant revenue opportunities and cost savings, AIM and Med-Emerg noted.
The deal was completed by way of a court-approved plan under the Business Corporations Act (Ontario), the companies noted. AIM issued 0.78091 of an AIM common share for each MedEmerg common share with the existing MedEmerg shareholders representing a roughly 43% interest in the combined company.
In addition, Calian Technologies, the sole holder of Series 1 special shares of MedEmerg, exchanged all of such shares for a convertible debenture of AIM.
The plan received the overwhelming support of the MedEmerg shareholders, with more than 90% of the votes cast in favor of the transaction, the companies said.
David Kassie, CEO/chairman of Genuity Capital Markets and Sidney Braun, president of ROMlight International, both shareholders of MedEmerg, will be appointed to the board of directors of AIM at its next annual shareholders' meeting.
"We have spent the last three months working very closely with the management team of MedEmerg," said Lu Michael Barbuto, president/CEO of the AIM Health Group. "I believe more firmly than ever that the combined clinical expertise and business talent of both companies will go a long way in creating a very strong Canadian healthcare services company which can help address the healthcare needs of Canadians. The addition of the MedEmerg services to our already diverse array of health services will be beneficial to health consumers, physicians and other key service providers. I look forward to working with the members of the MedEmerg team and continuing to provide healthcare solutions and growth to our new company."
MedEmerg also reported that Dr. Ramesh Zacharias, its founder and CEO, is leaving MedEmerg after 25 years of service.