etrials_8k-053009.htm
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) May 30, 2009
ETRIALS WORLDWIDE,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State or
other jurisdiction of incorporation)
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000-50531
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20-0308891
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(Commission
File Number)
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(IRS
Employer ID Number)
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4000 Aerial Center Parkway,
Morrisville, North Carolina 27560
(Address
of principal executive
offices) (Zip
Code)
Registrant's
telephone number, including area code (919)
653-3400
__________________
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:
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T
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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£
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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T
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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£
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry into a Material Definitive Agreement.
Proposed Transaction with
Merge Healthcare
On May 30, 2009, etrials Worldwide,
Inc., Merge Healthcare Incorporated and Merge Acquisition Corp., a newly formed
wholly-owned subsidiary of Merge Healthcare (“Merger Sub”), entered into an
Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Merger
Sub will commence a tender offer (the “Offer”) to acquire all of the outstanding
shares of common stock of etrials (the “Shares”) in exchange for: (i) $0.80 in
cash, without interest (the “Cash Consideration”), and (ii) 0.3448 newly issued
shares of Merge Healthcare’s common stock, par value $0.01 per share
(collectively, the “Offer Price”). Following the consummation of the Offer,
Merger Sub will merge with and into etrials (the “Merger”), and all Shares not
acquired in the Offer (other than Shares held by the etrials’ holders who have
properly exercised their dissenters’ rights under Section 262 of the Delaware
General Corporation Law) will be converted into the right to receive the greater
of (i) the Offer Price and (ii) the highest price per Share paid to any holder
of etrials common stock pursuant to the Offer, in the same form of consideration
paid (the “Merger Consideration”). The Merger Agreement contains customary
representations, warranties and covenants by the parties. etrials has also
agreed not to solicit or initiate discussions with third parties regarding other
proposals to acquire etrials and to certain restrictions on its ability to
respond to such proposals. The Merger Agreement also includes customary
termination provisions for etrials and Merge Healthcare and provides that, in
connection with the termination of the Merger Agreement under specified
circumstances, etrials will be required to pay Merge Healthcare a termination
fee of $500,000, plus reimburse Merge Healthcare for reasonable out of pocket
expenses up to $250,000.
Merge Healthcare agreed that Merger Sub
would commence the Offer as promptly as practicable. The Offer will remain open
for no more than 20 business days, subject to extensions in certain instances.
The obligation to accept for payment and pay for the Shares tendered in the
Offer is subject to customary conditions, including, among other things: (i) the
tender of a majority of the total number of outstanding Shares, on a fully
diluted basis, (ii) Merge Healthcare must file a Form S-4 registering the common
stock to be issued in the Offer, and such registration statement must go
effective, (iii) the absence of any law prohibiting, restraining or enjoining
the Offer, (iv) the absence of any material adverse effects on etrials, (v) the
accuracy of the representations of etrials, and (vi) compliance with covenants
by etrials.
In the Merger Agreement, etrials
granted to Merge Healthcare and Merger Sub an irrevocable option (the “Top-Up
Option”) to purchase, at a per Share price equal to the greater of (i) $1.70 and
(ii) an amount equal to the highest price per Share paid pursuant to the Offer,
up to that number of newly issued Shares that, when added to the number of
Shares, directly or indirectly, owned by Merge Healthcare and Merger Sub
constitutes one Share more than 90% of the Shares outstanding, on a fully
diluted basis. The Top-Up Option is exercisable only after Merge Healthcare and
Merger Sub own at least 80% of the outstanding Shares and prior to the fifth
business day after the expiration date of the Offer or any subsequent offering
period, and is not exercisable if the number of Shares that would need to be
issued (taken together with the number of Shares outstanding, on a fully diluted
basis) exceeds the number of authorized but unissued Shares.
In addition, certain stockholders of
etrials have agreed to enter into tender and support agreements pursuant to
which such stockholders have committed to accept the Offer and to tender all
Shares beneficially owned by them, which represents, in the aggregate,
approximately 33% of etrials’ outstanding Shares.
Termination of Merger
Agreement and Stockholder Support Agreements with Bio-Imaging Technologies,
Inc.
Also on May 30, 2009, etrials,
Bio-Imaging Technologies, Inc. and BioClinica Acquisition, Inc. terminated the
merger agreement among them dated as of May 4, 2009, as amended on May 15 and
19, 2009, providing for the previously announced acquisition of etrials by
Bio-Imaging. As a result of the termination of the Bio-Imaging merger
agreement, the stockholder support agreements between certain stockholders of
etrials and Bio-Imaging were terminated automatically pursuant to their
terms. Also as a result of the termination of the Bio-Imaging merger
agreement, etrials will be required to pay Bio-Imaging a termination
fee of $500,000, plus reimburse Bio-Imaging for reasonable out of pocket
expenses up to $250,000.
Other
Information
The foregoing descriptions of the
Merger Agreement and the form of Stockholder Support Agreement for the
acquisition of etrials by Merge Healthcare are qualified in their entirety by
reference to the full texts of the Merger Agreement and the form of Stockholder
Support Agreement, which are filed as exhibits to this current report and are
incorporated herein by reference. The Merger Agreement among etrials,
Merge Healthcare and Merger Sub is substantially identical to the now terminated
merger agreement between etrials and Bio-Imaging. The form of
Stockholder Support Agreement between certain stockholders of etrials and Merge
Healthcare is substantially identical to the now terminated stockholder support
agreements between those etrials stockholders and Bio-Imaging. The
Bio-Imaging merger agreement and form of stockholder support agreement were
filed as exhibits to etrials’ current report on Form 8-K filed with the SEC on
May 5, 2009.
The Merger Agreement has been attached
to provide investors with information regarding its terms. It is not intended to
provide any other factual information about etrials, Merge Healthcare or Merger
Sub. In particular, the assertions embodied in the representations and
warranties contained in the Merger Agreement are qualified by information in
confidential schedules of exceptions provided by etrials to Merge Healthcare and
Merger Sub, and vice versa, in connection with the signing of the Merger
Agreement. These schedules of exceptions contain information that modifies,
qualifies and creates exceptions to the representations and warranties set forth
in the Merger Agreement. Moreover, certain representations and warranties in the
Merger Agreement were used for the purpose of allocating risk between etrials
and Merge Healthcare and Merger Sub, rather than establishing matters as facts.
Accordingly, you should not rely on the representations and warranties in the
Merger Agreement as characterizations of the actual state of facts about
etrials, Merge Healthcare or Merger Sub.
On June 1, 2009, etrials and Merge
Healthcare issued a joint press release announcing the execution of the Merger
Agreement and the termination of the Bio-Imaging merger agreement. A copy of the
press release is attached as Exhibit 99.1 to this report and is incorporated in
this report by reference.
NOTICES
This announcement and the description
contained herein are for informational purposes only and are not an offer to
purchase or a solicitation of an offer to sell securities of etrials. The tender
offer described herein has not yet been commenced. At the time the tender offer
is commenced, Merge Healthcare and Merger Sub intend to file a tender offer
statement on a Schedule TO containing an offer to purchase/prospectus, a letter
of transmittal and other related documents, as well as a registration statement
on Form S-4, with the Securities and Exchange Commission, or SEC. At the time
the tender offer is commenced, etrials intends to file with the SEC a
solicitation/recommendation statement on Schedule 14D-9 and, if required, will,
file a proxy statement or information statement with the SEC in connection with
the Merger, the second step of the transaction, at a later date. Such documents
will be mailed to stockholders of record and will also be made available for
distribution to beneficial owners of common stock of etrials. The solicitation
of offers to buy Shares will only be made pursuant to the offer to
purchase/prospectus, the letter of transmittal and related documents.
Stockholders are advised to read the offer to purchase/prospectus and the letter
of transmittal, the solicitation/recommendation statement, the proxy statement,
the information statement and all related documents, if and when such documents
are filed and become available, as they will contain important information about
the tender offer and proposed Merger. Stockholders can obtain these documents
when they are filed and become available free of charge from the SEC’s website
at www.sec.gov, or from the information agent to be selected by Merge
Healthcare. In addition, copies of the solicitation/recommendation statement,
the proxy statement and other filings containing information about Merge
Healthcare, the tender offer and the Merger may be obtained, if and when
available, without charge, by directing a request to either; etrials Worldwide,
Inc., Attention: Jay Trepanier, Chief Financial Officer, at 4000 Aerial Center
Parkway, Morrisville, North Carolina 27560, or on etrials’s corporate website at
www.etrials.com; or to Merge Healthcare Incorporated: Attention: Julie Pekarek,
Investor Relations, at 6737 West Washington Street, Suite 2250, Milwaukee,
Wisconsin 53214-5650, or on Merge Healthcare Incorporated’s corporate website at
www.merge.com.
Safe
Harbor Statement
This report contains forward-looking
statements, including statements regarding the proposed transaction between
etrials and Merge Healthcare. All of these forward-looking statements
involve risks and uncertainties. Actual results could differ materially from
those discussed. Factors that could cause or contribute to such differences
include, but are not limited to, the ability of etrials and Merge Healthcare to
complete the transaction contemplated by the Merger Agreement, including the
parties’ ability to satisfy the conditions set forth in the Merger Agreement,
and the possibility of any termination of the Merger Agreement. In
addition, other important factors that could cause results to differ materially
include those related to the expected timing and financial or other benefits of
the transaction, the timing of filings and approvals related to the transaction
and the expected timing of the closing of the transaction, the ability of
etrials and Merge Healthcare to execute their business strategy if the proposed
transaction is consummated, strategic decisions regarding etrials’ and Merge
Healthcare’s businesses, and general financial, economic, regulatory
and political conditions affecting the economy and the pharmaceutical industries
generally. More information about potential factors that could cause actual
results to differ from the forward-looking statements included in this report is
included in etrials’ filings with the SEC, including the “Risk Factors” section
of etrials’ Annual Report on Form 10-K for the year ended December
31, 2008. All forward-looking statements are based on information available to
etrials on the date hereof, and etrials assumes no obligation to update such
statements, except as required by law.
Item
9.01. Financial Statements and Exhibits.
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Exhibit No.
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Description
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2.5
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Agreement
and Plan of Merger, dated as of May 30, 2009, by and among Bio-Imaging
Technologies, Inc., Merger Healthcare Incorporated and etrials Worldwide,
Inc.
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2.6
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Form
of Stockholder Support Agreement, dated May 30, 2009, by and among Merger
Healthcare Incorporated and the directors, executive officers and certain
stockholders of etrials Worldwide, Inc.
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99.1
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Joint
press release, dated June 1, 2009, of etrials Worldwide, Inc. and
Merge Healthcare Incorporated.
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SIGNATURE
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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ETRIALS
WORLDWIDE, INC.
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Date: June
1, 2009
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/s/ M. Denis
Connaghan
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M.
Denis Connaghan
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President
and Chief Executive Officer
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