Merge Healthcare convertible preferred stockholders waive put right

Put option was scheduled to expire Aug. 25

By Angela McDaniels

Tacoma, Wash., June 19 – Merge Healthcare Inc. said the holders of its series A convertible preferred stock decided to waive their right to require Merge to redeem their preferreds at any time prior to Aug. 25.

Merge issued the preferreds in February in a $50 million private placement that helped finance its acquisition of D.R. Systems, Inc.

"The unconventional redemption feature of the preferred stock was required by the investors in order to move quickly in February. The preferred stock purchasers requested a window of time following the closing of the acquisition to better evaluate the D.R. Systems business and the benefits to Merge," Merge chief executive officer Justin Dearborn said in a company news release.

“We believed their request to be reasonable given the compressed timeline, and we were confident that the holders would agree with our assessment of the transaction. We are delighted that the holders have now completed their evaluation and have decided to terminate the put right, well in advance of its scheduled expiration in August.”

Merge provides health information systems for medical imaging, interoperability, and communication and is based in Chicago.

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