The Conshohocken, Pa.-based wireless cardiac device maker today announced its plans to purchase Eagan, Minn.-based Biotel Inc. for $11 million, or $3.84 per share, a 156 percent premium over its Nov. 5 closing price of $1.50.
CardioNet and Biotel also agreed to dismiss outstanding litigation between them when the deal closes and expect the transaction to be complete by the end of the year. The merger’s success, however, is still subject to shareholder approval.
CardioNet had first announced plans to buy Biotel in April 2009 for $14 million, but canceled its plans for unspecified reasons. The company may have lost the financial fortitude for the deal after Highmark CMS cut its reimbursement rate for Mobile Cardiac Outpatient Telemetry services substantially from $1,234.07 to just over $700, a setback which precipitated a shareholder lawsuit.
The Biotel acquisition includes its Braemar subsidiary’s wireless event monitor, which "enhances CardioNet’s position in the field of wireless medicine," according to the company. The deal also enables CardioNet to enter into the clinical services market with the event, Holter and twelve-lead ECG monitoring services of Biotel subsidiary Agility Centralized Research Services, the company said.
Biotel’s shares were up $2.21 to $3.71, or 147 percent, in late morning trading.