Amicas Inc. closed its $39 million buyout of Emageon Inc. after the Birmingham, Ala.-based medical imaging software firm settled a lawsuit with shareholders trying to block the deal.
Boston-based Amicas, which provides medical imaging software and services, said the deal, for which it paid $1.82 per share to Emageon stockholders, expands its footprint in the healthcare IT field and makes the company a leader in the imaging and information business with a combined 1,000 customers.
The deal was held up when Emageon shareholders filed a class-action lawsuit against members of the Emageon board of directors, accusing them of violating their fiduciary duties by failing to maximize shareholder value.
The companies reached a settlement with plaintiff Philip Fishman March 27, after agreeing to release more information about the merger.
But Emageon’s road to an exit was anything but smooth, according to a filing with the federal Securities and Exchange Commission.
At the start of 2007, Emageon’s stock was trading at more than $15 a share, down from a high-water mark of more than $18, when officials began to consider the direction of the firm after examining market trends and Emageon’s position in the industry.
The company retained officials from SunTrust Robinson Humphrey, an investment bank in Atlanta, Ga., in May 2007 to start investigating “potential strategic alternatives,” including possible mergers. For the next year and a half, SunTrust officials looked for potential partners as sales slipped along with the company’s stock price.
The situation was further complicated by a nasty proxy fight in the summer of 2008 between the board and Oliver Press Partners LLC, a New York-based investment firm that owned 12 percent of the company.
Officials from Oliver Press pushed to increase the size of Emageon’s board, eventually succeeding in adding two partners from Oliver Press.
In the late fall of 2008, Emageon finally emerged with a prospective buyer, Health Systems Solutions Inc. an HIT provider in New York. HSS put in a tender offer for Emageon of $3 a share, or $62 million, which the company’s board accepted.
But as the two moved toward closing last December, Stanford International Bank, citing the turbulent credit market, pulled its funding for the deal and the deal fell apart.
That forced Emageon back into the open market, where Amicas won the bidding with a $1.82-per-share, $39 million offer.
It seems like a good deal for Amicas, because Emageon still has $24 million in total stockholder equity that Amicas will have access to, according to an SEC filing. Emageon booked almost $70 million in revenues last year.