Image management firm Emageon of Birmingham, AL, has agreed to be acquired by Health Systems Solutions (HSS) of New York City.
Boards of both companies have approved an all-cash stock transaction valued at $2.85 per share, or approximately $62 million. The price is approximately 37% greater than Emageon's share price at the close of the market on October 13.
The new entity will have approximately 400 employees. Emageon's current management will continue to operate the business as part of HSS' group of companies, and sales and support functions of both organizations will be maintained.
Until the transaction closes, each company will continue to operate independently. If and when the acquisition is completed, HSS anticipates applying for listing on the Nasdaq stock market.
The transaction remains subject to the approval of Emageon's stockholders, as well as certain customary closing conditions. Emageon's board of directors recommends that Emageon's stockholders approve the sale.
Investment firm Oliver Press Partners, which owns approximately 17% of Emageon's voting stock, and all officers and directors of Emageon plan to vote in favor of the transaction.
HSS is financing the acquisition with $85 million provided by Stanford International Bank, a member of the Stanford Financial Group and HSS' principal shareholder. HSS plans to use the additional funds for working capital and to fund growth initiatives.
HSS sought to acquire Emageon as the first step in its goal of building a top healthcare information technology company, HSS CFO and EVP Michael Levine told AuntMinnie.com. Emageon will be the "platform" acquisition for HSS, allowing the company to realize synergies from future acquisitions.
HSS was also attracted by Emageon's market, products, and employees, Levine said.
"We came away from our due diligence very impressed both with the team that's there, as well as the road map that they have," Levine said. "We think that we're in a position to really help facilitate the speed at which they can realize their vision."
As for Emageon, its acquisition by HSS will add stability for the firm, Levine said.
"HSS has a very large financial sponsor behind us in the Stanford Financial Group, and I think it puts us in the position to give customers and potential customers a very high comfort level that Emageon and the team that built it are going to be there for the long-term," he said. "With the technology experts that we have with the developers, engineers, and programmers that we bring on-board, I think it's only going to improve the products and help us quicken the pace of development."
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