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Merge Healthcare to buy Ophthalmic Imaging Systems

by Brendon Nafziger, DOTmed News Associate Editor | June 06, 2011
Merge Healthcare said Monday it would buy Ophthalmic Imaging Systems, a Sacramento-based maker of eye scanners and medical software, for an estimated $30.3 million in an all-stock deal. The deal, pending customary closing conditions, is expected to wrap up in the third quarter.

In the purchase, Chicago-based Merge said OIS shareholders would receive a 0.1693 share of Merge's common stock in exchange for each share of OIS' stock, with the exchange calculated to equal $1 per OIS share based upon a five-day, volume-weighted average of Merge's stock as calculated on Friday's close.

Merge said OIS shareholders holding 72 percent of OIS' outstanding stock have agreed to the acquisition.

"Merge Healthcare is a leader in virtually every image-intensive healthcare specialty, and with OIS we will add the important specialty of ophthalmology," Jeff Surges, CEO of Merge, said in a statement. "Demand for ophthalmic imaging solutions is increasing due to factors such as an aging population, improved treatment results based on early disease recognition and increased incidence of visual impairment, as well as the growing need for portable diagnostic equipment."

OIS makes the EyeScan imaging modules and, through its subsidiary Abraxas Medical Solutions, electronic medical record and practice management software. The company posted $1.5 million in losses for the first quarter, or 5 cents a share. Its sales of $3.5 million fell from last year’s $4.1 million in the same quarter.

According to Comtex News, Merge is one of the fastest-growing companies in health care, with year-over-year sales of 168 percent. It reported $173 million in sales over the past year, Comtex said.

In morning trading, OIS' shares rose 3.5 percent to reach 88 cents a share in over-the-counter trading. And Merge's stock fell 7.1 percent to reach $5.26 on NASDAQ.

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