Monday, September 10, 2012

A Message From The CEO:
"Merge Is NOT For Sale"

Everyone on Merge's e-mail list received this message earlier today:

CAD Client Header
Dear Merge Clients,
I am writing to make you aware of a recent press release that Merge issued last week. This release indicated that we have hired Allen & Co., a premier financial advisor, to evaluate our strategic options. 

As a result of this communication, many of you have come to us with questions. I want to take this opportunity to clarify three critical points that are important for our clients to know:

  1. Merge solutions and product roadmaps are safe. Merge offers industry leading products, delivered by a dedicated and talented workforce, with tremendous market share that will continue to live on and thrive under any ownership model.
  2. Merge is and will continue to be a productive leader in healthcare IT. This action is a positive one. We are a cutting-edge, multi-hundred million dollar company that continually evaluates opportunities to improve our business.  
  3. Merge is not for sale. As a publicly traded company, we have a fiduciary duty to our shareholders; to investigate all opportunities in their best interests.
While there are no assurances that the engagement of financial advisors will result in a transaction of any sort, we want you to understand that this press release is a positive one for Merge. We are investigating all of our options to ensure a healthy, long-term business for our clients, our greatest assets.
Again, thank you for your continued dedication and support.


Jeff Surges

Chief Executive Officer
Merge Healthcare
I am certainly hoping that Merge is NOT for sale, especially given my discussions with Merge Brass over the years, and MOST especially given the short list of possible suitors. It was a logical conclusion to which to jump based on the prior e-mail and press-release telling us that Merge's
. . . 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.
Of course, AMICAS wasn't for sale, either. Sigh.


I just received a call from a member of the Merge Brass. I am reassured that the actions are simply proper financial due dilligence, and Merge is indeed NOT for sale. Case closed. For now, anyway.


stacey said...

What would some of the other strategic alternatives be, other than a sale or merger? Taking it private?

Anonymous said...

Merge is burning money since years. I was always wondering how long it would take....

Anonymous said...

Dr. Dalai:

Merge may be on the block. According to the "Deal Reporter" (a Financial Times publication), private equity is interested between $5 and $6. Knowing Ferro, this is probably him telling interested parties what he'll accept. It's quite possible that he's got a bid in the $4 or $4.50 range, but wants more.

Thoma Bravo, the private equity firm which lost the Amicas bidding war (but claimed a nice parting gift courtesy of Merge), has been active of late. It just acquired Mediware today for around $200 million. Could be that Thoma will, in the end, get Amicas (along with Merge and all the other properties acquired by Ferro over the past 4 years).

These situations create uncertainty among the customer base, which can degrade the asset over time. Also, Merge has another big interest payment due in November. Ferro has pulled the pin, which was a risk. He's got to move, and move fast.

Anonymous said...

The Merge Brass says this is just proper financial due diligence, but that they aren't for sale. Huh? Who does "financial due diligence" for a reason other than buying or selling?