A Medical Device Daily

HLTH (Elmwood Park, New Jersey) and its 84%-owned subsidiary, WebMD Health (New York), have entered into an agreement in which HLTH will merge into WebMD.

Each outstanding share of HLTH common stock will be converted into 0.1979 shares of WebMD common stock and $6.89 in cash. The outstanding shares of WebMD Class A common stock will remain outstanding and will be unchanged in the merger.

The merger will eliminate both the controlling class of WebMD stock held by HLTH and WebMD's existing dual-class stock structure.

"This merger will achieve the objectives set forth by both companies at the beginning of this process," said Martin Wygod, acting CEO and chairman of HLTH, and chairman of WebMD. "The merger is expected to reduce WebMD's share count by 20%, to eliminate HLTH's controlling interest in WebMD and to capitalize WebMD with approximately $700 million in cash and investments."

Based on Wednesday's closing prices, Wygod said that HLTH shareholders will receive a 26% premium for their shares and direct ownership in WebMD. Upon completion of the merger, HLTH shareholders will own about 80% of WebMD, based on the shares currently outstanding at HLTH and WebMD.

The cash portion of the consideration will be funded from cash and investments at WebMD and HLTH, and proceeds from HLTH's anticipated sales of its ViPS and Porex businesses.

If either ViPS or Porex has not been sold at the time the HLTH-WebMD merger is ready to be consummated, WebMD may issue up to $250 million in redeemable notes to the HLTH shareholders in lieu of a portion of the cash consideration otherwise payable in the merger.

There will be about 45 million shares of WebMD common stock outstanding following merger close, representing, representing a reduction of about 20% from the 57 million WebMD shares outstanding.

The senior management team of WebMD will continue to lead the organization under Wayne Gattinella, president/CEO.

Raymond James and Associates served as financial advisor to HLTH; Morgan Joseph & Co. served as financial advisor to the WebMD special committee. O'Melveny & Myers served as legal counsel to HLTH; Cahill Gordon & Reindel served as legal counsel to the special committee.

WebMD is a provider of health information services.

Millipore (Billerica, Massachusetts) reported a worldwide, non-exclusive license agreement with Bayer HealthCare (Leverkusen, Germany), to use Millipore's UCOE (Ubiquitous Chromatin Opening Element) technology to manufacture its biologic drugs. Financial terms were not disclosed.

The license will enable Bayer to "more efficiently" manufacture recombinant proteins in mammalian cells by generating higher protein yields in its upstream bioprocessing. Bayer said it plans to expand the use of the UCOE technology from small-scale use in R&D to large-scale manufacturing to reduce the cost of manufacturing recombinant protein-based drugs.

In other dealmaking:

• I-many (Edison, New Jersey), a provider of contract management software and services, has completed the previously disclosed acquisition of the ClaimRight data validation software business from Global Healthcare Exchange (Louisville, Kentucky) for $2.2 million in cash, with $1.6 million payable at closing and $600,000 in milestone payments over the following year.
  "We can now begin the process of integrating the data validation assets into our current product portfolio," said David Blumberg, executive VP of fulfillment services for I-many. "Incorporating the ClaimRight data validation software into our current life sciences solutions will [provide] an even more powerful solution to manage critical compliance applications internally, and effectively mitigate fraud, duplication and legal liability."
• Claimsnet.com (Dallas), a provider of electronic transaction services to the healthcare industry, said it has acquired the assets of Acceptius (Dallas).
  Claimsnet paid Acceptius the sum of $25,000 in cash and issued 1.7 million restricted shares of Claimsnet's common stock, at 1 cent a share. Claimsnet will pay Acceptius another $5,000 within the next six months.
  Claimsnet said it believes the transaction will add about 35% to its revenue by adding paper conversion and claims repricing to its suite of services for healthcare and extend its claims processing capabilities.
• A new company, BioHorizons (Birmingham, Alabama), has been formed to create new digital dentistry products in the dental implant market by combining DTI Dental Technologies (Dublin, California) and BioHorizons Implant Systems (Birmingham). Financial details of the merger were not disclosed.
  The combined company generated about $150 million in revenues in 2007. It will have 23 operating facilities in North America, eight international facilities and more than 1,000 employees.