etrials Worldwide, the troubled US-based supplier of adaptive eClinical software and services, has jettisoned its planned merger with Bio-Imaging Technologies (BioClinica) in favour of a higher bid from health information technology specialist Merge Healthcare.
BioClinica conceded defeat after etrials reached a definitive agreement to be acquired by Merge Healthcare in a deal worth around US$18 million. BioClinica had already raised its offer for etrials after the latter received an unsolicited offer from an undisclosed party. That took the value of BioClinica’s bid up to US$1.35 per etrials share, in a tender offer that was due to expire on or around 20 June 2009.
But then Merge stepped in with what the etrials board deemed a ‘superior proposal’ under the terms of the agreement originally signed with BioClinica on 4 May. The Merge tender offer comprises US$0.80 in cash and 0.3488 shares of Merge common stock for each share of etrials common stock, giving an aggregate value of US$1.70 per share based on the 20-day volume-weighed average price of Merge common stock as of the close of market on 26 May, the last trading day before the US company made its offer.
As things stood on 01 June, stockholders representing around 33% of etrials’ outstanding shares had already agreed to tender their stock. The deal is expected to close in the third quarter of 2009. etrials is obliged to pay BioClinica a termination fee of US$500,000 and to reimburse the latter for any reasonable out-of-pocket expenses up to a total of US$250,000 on or before 2 June 2009.
Imaging, eClinical
Merge and etrials said the combined company would provide clinical trial sponsors and contract research organisations (CROs) with “comprehensive and configurable solutions that include both critical imaging technologies and proven eClinical capabilities”.
The Merge OEM team (OEM means Original Equipment Manufacturer or ‘bundled’ software) has been supplying imaging solutions to pharmaceutical companies, CROs, the US National Institutes of Health and veterinary hospitals “for years”, noted Justin Dearborn, chief executive officer (CEO) of Merge Healthcare.
Particularly with clinical trials becoming increasingly dependent on imaging information, he believes there could be “significant synergy from incorporating our imaging and data hosting solutions with etrials’ broad portfolio of integrated eClinical solutions”.
With no overlap between etrials’ offerings and Merge’s products, the deal enables both companies’ to leverage each other’s customer relationships, creating opportunities for cross- and up-selling, Dearborn added. Moreover etrials’ experience in conducting global clinical trials gels with Merge’s international expansion initiatives.
According to Denis Connaghan, CEO of etrials, the acquisition agreement “continues with our strategy to take the industry in a new direction that is increasingly in demand by bringing our customers access to additional capabilities that we believe increase the value of the important clinical trial development they perform”.
It also gives the etrials organisation “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”, he said.
Mark Weinstein, president and CEO of BioClinica, commented: “We have decided it would not be in the best interest of our shareholders to pursue this acquisition further. Although we are disappointed with the outcome, we will continue to actively look for other acquisitions that would add value and expand our eClinical services offering.”
