Thursday, September 06, 2012

NEWS FLASH!
MERGE FOR SALE?????

As one of Merge's best most famous customers, I am on several of their email newsletter lists. This rather intriguing message arrived a few moments ago:


Merge Engages Allen & Company LLC to Explore and Evaluate Strategic Alternatives

CHICAGO, Sept. 6, 2012 (GLOBE NEWSWIRE) -- Merge Healthcare Incorporated (Nasdaq:MRGE) ("Merge" or the "Company"), a leading provider of clinical systems and innovations that seek to transform healthcare, today announced that its Board of Directors has retained Allen & Company LLC, a New York-based investment bank, to assist in exploring and evaluating a broad range of strategic alternatives, including, but not limited to, a sale of the Company or a business combination.

The Company does not have a defined timeline for the strategic review, and there can be no assurance that the review will result in any specific action or transaction. The Company does not intend to comment further regarding the evaluation of strategic alternatives, unless a definitive agreement for a specific transaction is entered into, the process is concluded, or it otherwise deems further disclosure is appropriate or required.
OK...

So we are shopping Merge around, are we? What hath God (or Michael Ferro) wrought?

My friend the Once One and only PACSMan, Mike Cannavo, has been saying since Day One of the Merge buyout of AMICAS that this would happen. His prediction...Cerner will be the big winner. This makes sense, as Cerner's PACS has a reputation I wouldn't want for my worst enemy, and as a user of their EMR, I can tell you that isn't a whole lot better. If I were the brass in Kansas City, I would certainly take a page out of GE's playbook and buy a ready-made replacement for my rather, ummmmm, unappreciated product-line.

On the other hand, CEO Jeff Surges' old haunt, Allscripts, might want a piece of this, too. You never know.

Of course, it is completely possible that Merge is simply weighing its options and will just continue to to what its doing. We'll see.

More to come, I'm sure...

ADDENDUM

My friend 23Skidoo refers us to HealthImaging.com:
The developer of enterprise imaging and interoperability technologies delved further into the imaging informatics space in April 2010 with the acquisition of PACS giant Amicas. Following that merger, Merge posted a net loss of nearly $31 million in 2010, which the company partly attributed to the acquisition costs.

Despite posting continued sales growth, the company reported a net loss of $10 million for the fiscal year of 2011 and a net loss of $5.9 million in second quarter 2012.
Things were looking up, I thought...

And a prescient note from "Sadie" on HISTALK:
From Sadie“Re: Merge Healthcare. Three weeks after an RIF in France and one week after a 56-person RIF in the US, Merge announces plans to sell the company. I hate to say that I called this months ago.”

1 comment:

Anonymous said...

Merge has been trying to transition to a subscription/cloud model. Not necessarily working as expected. Not much if any organic growth.

They've got a debt rollover coming in 2015, and interest payments are sapping the company's strength.

Also, Ferro doesn't really seem that interested in healthcare anymore. He's trying to become a news mogel now. He's a dilettante. I think the original plan was to have Allscripts take control of Merge, but Allscripts hit a wall, so that's not too likely (although never say never).