Monday, August 26, 2013

Merge: Ferro Resigns As Pharaoh

From this morning's Merge email blast:


Michael W. Ferro, Jr. Steps Down as Chairman of Merge Healthcare

Dennis Brown Appointed New Chairman

CHICAGO, (GLOBE NEWSWIRE) -- Merge Healthcare Incorporated (Nasdaq:MRGE), a leading provider of clinical systems and innovations that seek to transform healthcare, today announced that its Board of Directors has accepted the resignation of Michael W. Ferro, Jr. as Chairman and a Director of the Company and appointed Dennis Brown as the Company's new Chairman, both effective immediately.

"I have decided to step down from my roles as Chairman and a Director of Merge Healthcare," said Michael W. Ferro, Jr. "Merge is at the heart of a large, growing and dynamic market for healthcare imaging, and, as its largest shareholder, I have a lot riding on its future success. I remain very confident in the Company, its products and its new leadership team, and my decision does not reflect any disagreement with Merge's management or Board. Rather, I have worked with Justin Dearborn and Nancy Koenig for many years and know that they can and will move the Company forward. In addition, all Merge stockholders are extremely fortunate to have an experienced and capable leader like Dennis Brown ready to step in as our next Chairman. I will be available to Justin, Nancy, Dennis and the rest of the Board in the future should they want my input. "

"Although Merge's second quarter results were very disappointing, I do not believe that the current trading price of Merge common stock reflects the Company's inherent strengths, market position or long-term prospects." Mr. Ferro continued, "While I have no immediate plans in this regard, over time, I intend to explore a variety of ways to increase shareholder value, including, possibly, a going-private transaction. Of course, overall industry and market conditions, the Company's business and financial performance and the availability of equity and debt capital and other factors will affect whether a transaction would be advisable. Accordingly, neither Merge nor I can speculate or provide any assurance as to whether, when, or on what terms such a transaction might occur."

Mr. Ferro served as Merge's Chairman and a Director since June, 2008, when Merrick RIS, LLC made a significant investment in the Company. Merrick RIS and other affiliates of Mr. Ferro own approximately 26.6 million shares of Merge's common stock.

"On behalf of all of Merge's Directors, I want to thank Michael for his leadership, commitment and vision during his five-year tenure as our Chairman," said Justin C. Dearborn, Merge's CEO. "The entire Merge team will remain focused on the goals and plans that he helped establish, and we look forward to his continued support in the years ahead."

Mr. Brown, one of Merge's longest-serving Directors, has been associated with the Company since its initial public offering in 1997. He brings a wealth of management experience and financial expertise to his new role of Chairman. Mr. Brown spent 20 years in senior management with the Allen-Bradley Company (now Rockwell Automation) in the US and Europe and 10 years as Vice President of Finance, Treasurer and Chief Financial Officer of Sybron International Corporation, a global manufacturer of Life Science products. Mr. Brown currently serves as Chairperson of the Board's Compensation Committee and as a member of the Board's Audit and Nominating and Governance Committees.

"I have been involved with Merge for many years now and am a great believer in the Company, its technology platform and its highly-professional management team," said Mr. Brown. "As Chairman, I will be making myself fully available to work with the management team to achieve our goals of serving our customers, growing our market position and enhancing shareholder value."

About Merge

Merge is a leading provider of clinical systems and innovations that seek to transform healthcare.  Merge's enterprise and cloud-based solutions for image intensive specialties provide access to any image, anywhere, any time. Merge also provides health stations, clinical trials software and other health data and analytics solutions that engage consumers in their personal health. With solutions that are used by providers and consumers and include more than 25 years of innovation, Merge is helping to reduce costs and improve the quality of healthcare worldwide. For more information, visit

Cautionary Notice Regarding Forward-Looking Statements

The matters discussed in this news release may include forward-looking statements, which could involve a number of risks and uncertainties. When used in this press release, the words "will," "believes," "intends," "anticipates," "expects" and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those expressed in, or implied by, such forward-looking statements. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements.'s not quite the end of an era, but...

I can only guess at the reasoning behind Michael's "departure". He does make it quite clear he's not really going anywhere, just putting down the mantle of chairmanship. Merrick Ventures will continue to own a significant chunk of Merge stock (anyone hear of a sell-off? I haven't.) Having met Mr. Ferro a few times, I've been incredibly impressed with his energy and entrepreneurial spirit. I'm going to take the high road and assume that he is off to newer things, having set Merge on a (hopefully) straight course.

An old friend pointed out the clause in the message about a "going-private" transaction. We were both reminded of the days when AMICAS was about to be taken private by Thora Bravo, a decision I cheered at the time, but one which was quashed by investors and their lawyers, to the ultimate benefit of Merge. Perhaps we will go back to the future after all.

In any case, I'm looking forward to meeting Mr. Brown one of these days. He's got some big shoes to fill.


Anonymous said...

That certainly caught me by surprise.

Anonymous said...

The President/CEO, the Chairman, and the VP of Sales, all out within the last 30 days. I think that qualifies as an implosion.

Anonymous said...

Merge is continously producing negative earnings since years. The rats are leaving the sinking ship.

Unknown said...

If only it were cheaper to change PACS vendors...