UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event
reported): February
28, 2010
Merge
Healthcare Incorporated
(Exact
name of registrant as specified in its charter)
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Delaware
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39-1600938
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(State
or Other Jurisdiction of
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(I.R.S.
Employer
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Incorporation
or Organization)
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Identification
No.)
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6737
West Washington Street, Suite 2250
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Milwaukee,
Wisconsin
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53214
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(Address
of Principal Executive Offices)
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(ZIP
Code)
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(414)
977-4000
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
On
February 28, 2010, Merge Healthcare Incorporated (“Merge”) delivered a binding
offer letter (the “Offer”) to AMICAS, Inc., a Delaware company (“AMICAS” or the
“Company”) under which Merge offered to acquire all of the outstanding shares of
AMICAS for $6.05 per share. In connection with the Offer, Merge
delivered an Agreement and Plan of Merger pursuant to which the Offer would be
made (the “Merger Agreement”). Upon acceptance by AMICAS of the
Offer, the Merger Agreement would be deemed effective as of February 28,
2010. The Offer is not subject to any due diligence or financing
condition.
The Offer
was made with the understanding that AMICAS was bound by the Agreement and Plan
of Merger (the “Existing Merger Agreement”) by and among AMICAS, Project Alta
Holdings Corp., a Delaware corporation (“Parent”) and Project Alta Merger Corp.,
a Delaware corporation and wholly-owned direct subsidiary of Parent (“Merger
Sub”), dated as of December 24, 2009. Parent is owned by a
private equity fund associated with Thoma Bravo, LLC (“TB”). The
Offer contemplated that, in accordance with the terms of the Existing Merger
Agreement, AMICAS will offer to negotiate in good faith with TB during the five
business day period ending March 8, 2010, to make such adjustments in the terms
and conditions of the Existing Merger Agreement such that the Offer would cease
to constitute a Superior Proposal, as defined by the Existing Merger
Agreement. The AMICAS Board of Directors has authorized the Company
to terminate the Existing Merger Agreement in order to enter into the Merger
Agreement if, following negotiations with TB, the Offer continues to be a
Superior Proposal.
The Offer
expires upon certain events, including of AMICAS’s failure to accept, execute
and deliver the Merger Agreement to Merge by 10:00 a.m. Eastern Standard Time on
March 9, 2010.
In
connection with the Offer, Merge has obtained equity and debt financing
commitments for the transactions contemplated by the Merger
Agreement. Merge and Morgan Stanley Senior Funding, Inc. have
executed a definitive commitment letter for $200 million of bridge financing to
finance, in part, Merge’s proposed Offer. A copy of this financing
commitment was filed as Exhibit 99.1 to Merge’s Schedule TO-C dated February 24,
2010 and is incorporated herein by reference. Merge has also
entered into equity investment letters under which Merge has agreed to issue $40
million of nonvoting equity securities to four investors (the “Equity Commitment
Letters”). The investors contributed cash in the amount of the
purchase price of the equity securities, which Merge agreed to hold in escrow
until either the equity investment was completed or the expiration of the Equity
Commitment Letters. In exchange for the equity commitments, each of
the investors received a fee equal to 2% of the amount such investor will pay
for the equity securities (except that Merrick RIS LLC and Merrick Venture LLC
shall receive the fee only if the Merger is completed). In the event
that the Equity Commitment Letters expire prior to the issuance of any equity
securities, the investors will receive interest on the amounts paid under the
equity commitment at a 6% annual rate (other than Merrick RIS LLC and Merrick
Venture Management LLC). Merrick RIS LLC and Merrick Venture
Management LLC agreed to purchase an aggregate $30 million of the equity
securities to be issued under the Equity Commitment Letters. Merrick
RIS, LLC beneficially owns, as of February 28, 2010, 42.7% of Merge’s
outstanding common stock. Michael W. Ferro, Jr., our Chairman
of the Board, and trusts for the benefit of Mr. Ferro’s family members
beneficially own a majority of the equity interest in Merrick RIS,
LLC. Mr. Ferro also serves as the chairman and chief executive
officer of Merrick RIS, LLC. Merrick Ventures, LLC is an affiliate of
Merrick RIS, LLC. In addition, Justin C. Dearborn, our Chief
Executive Officer and a Director, served as Managing Director and General
Counsel of Merrick Ventures, LLC from January 2007 until his appointment as
Chief Executive Officer of Merge on June 4, 2008. A copy of the form
of Equity Commitment Letter is filed hereto as Exhibit 99.3 and is incorporated
herein by reference.
The
foregoing summary of the Offer letter and the Merger Agreement and the
transactions contemplated thereby does not purport to be complete and is
qualified in its entirety by the full text of the Offer letter and Merger
Agreement, which are attached as Exhibits 99.1 and 99.2 to this Current Report
on Form 8-K and incorporated herein by reference.
The
Merger Agreement has been included to provide investors and security holders
with information regarding its terms. It is not intended to provide any other
factual information about the Company. The representations, warranties and
covenants contained in the Merger Agreement if it becomes effective will be made
only for purposes of the Merger Agreement and as of specified dates, will be
solely for the benefit of the parties to the Merger Agreement, and will be
subject to limitations agreed upon by the contracting parties, including being
qualified by confidential disclosures exchanged between the parties in
connection with the execution of the Merger Agreement. The representations and
warranties may be made for the purposes of allocating contractual risk between
the parties to the Merger Agreement instead of establishing these matters as
facts, and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to investors. Investors
are not third-party beneficiaries under the Merger Agreement and should not rely
on the representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of AMICAS or Merge
or any of their respective subsidiaries or affiliates. Moreover, information
concerning the subject matter of the representations and warranties may change
after the date of the Offer letter, the Merger Agreement, which subsequent
information may or may not be fully reflected in the Company’s public
disclosures.
Item
9.01 Financial Statements and Exhibits.
Exhibit
99.1 Offer Letter dated as of February 28, 2010.
Exhibit
99.2 Agreement and Plan of Merger executed by Merge.
Exhibit
99.3 Form of Equity Investment Letter
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
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MERGE
HEALTHCARE INCORPORATED
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Mar
4, 2010
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/s/
Ann Mayberry-French
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By: Ann
Mayberry-French
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Title: General
Counsel
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