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April 6, 2010
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Merge Healthcare Incorporated (MRGE) recently received $41.75 million from 14 institutional and other accredited investors when it completed a private placement of preferred and common stock with them. The fund will be used for the proposed acquisition of AMICAS Inc. (AMCS).
Merge is set to acquire AMICAS for $6.05 per share in cash aggregating $248 million. The acquisition is expected to be completed in the second quarter of 2010.
Merge has already obtained $200 million of bridge financing from Morgan Stanley (MS). The company has also started a cash tender offer for all of the outstanding shares of AMICAS which will expire at 12:00 midnight, New York City time, on April 15, 2010, unless extended.
The successful acquisition of AMICAS will enable Merge to acquire one of its main competitors and widen its customer base. This will in turn expand the company’s top line.
Merge is a health care software and services company focused on integrating radiology workflow to improve productivity, profitability and patient care by fusing business and clinical workflow, and intelligently managing and distributing diagnostic images and information throughout the health care enterprise.
In the past, Merge has been paralyzed by several issues like a dwindling cash balance, management turnover, accounting miscues and litigations. The real turnaround started in the second quarter of 2008 when the company received the much-needed cash infusion of $20 million from Merrick RIS LLC in May 2008.
Presently, we have an ‘Underperform’ recommendation for Merge.
Read the full analyst report on "MRGE"
Read the full analyst report on "AMCS"
Read the full analyst report on "MS"
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