Howard Lamar of BBS' Corporate and Securities Practice
Nashville-based attorneys with Bass, Berry & Sims negotiated the $62 million deal to sell Birmingham-based Emageon Inc. to Health Systems Solutions.
Representing the Emageon board of directors' strategic alternatives committee are Bass Berry attorneys Howard Lamar (at right), Andy McQueen (at left), Ryan Thomas and Brandi Holland.
The proposed $62 million cash purchase of all Emageon stock was announced by Tampa-based HSS and will, if approved by the SEC and Emageon shareholders, produce a company with about 400 employees. HSS says current Emageon management will remain in-place.
HSS' purchase offer is backed by an $85 million facility provided by Stanford International Bank Ltd., a unit of Stanford Financial Group, which is HSS' dominant shareholder. Stanford Financial Group reports $50 billion in assets under management or advisement.
HSS unveiled the proposed sale Monday, after Emageon had experienced months of contention with a major shareholder over the company's performance.
In announcing the transaction, HSS said that Oliver Press Partners, which owns about 16.6 percent of Emageon stock, had agreed to support the transaction. Dissident shareholder OPP had challenged management in a proxy fight earlier this year, following 18 months of declining revenue and stock price.
In a letter to customers that Emageon filed with the SEC, CEO Charles Jett wrote, in part, "HSS and its principal shareholder, The Stanford Financial Group, have articulated a long term strategy to build a significant healthcare technology company."
In 2007, HSS' revenue and market capitalization were $7.2 million and $20 million, respectively, while Emageon's corresponding numbers were $105 million and $50 million. HSS trades on the OTCBB as HSSO; Emageon's on NASDAQ as EMAG. EMAG closed Oct. 16 at $2.44. At one point two years ago, EMAG traded at $16.50.
HSS Chairman and CEO Stan Vashovsky said in a statement Monday that HSS intends to use Emageon as its platform for further HSS acquisitions.
The company stressed its leverage Emageon's position in technology markets, in anticipation of a wave of technology refresh purchases by hospitals, healthcare networks and imaging facilities. HSS' business is weighted more toward providing home-health providers IT services, software, staffing and consulting.
Corporate counsel for HSS was Olshan, Grundman, Frome, Rosenzweig & Wolosky LLP. Financial advisors for Emageon were Jefferies & Co. and SunTrust Robinson Humphrey. Stanford Group Company was financial advisor to HSS. ♦