CollabRx, Inc. and Medytox Solutions, Inc. today announced that they have entered into a definitive merger agreement. Closing of the merger is subject to, among other things, gaining stockholder approvals from both companies, receipt of regulatory approvals and other customary closing conditions.
Under the terms of the agreement, which has been unanimously approved and adopted by the Boards of Directors of both CollabRx and Medytox, CollabRx equityholders will own a 10% stake in the combined company and Medytox equityholders will own 90% of the combined company, based on the number of equity securities outstanding immediately following the merger, and excluding convertible preferred shares and notes issued by Medytox, as well as option grants expected to be made in connection with the closing.
Medytox currently owns and operates a diverse family of healthcare companies, including several clinical testing laboratories, an electronic medical records provider, a laboratory information systems company and a medical billing company. CollabRx is a leading informatics company focused on the interpretation of complex molecular and genetic tests in cancer.
For the twelve months ending December 31, 2014, Medytox Solutions reported net revenue of $57.9 million and income from operations of $15.7 million, an increase of 38.3% and 8.0%, respectively, over the same twelve-month period in 2013. For the same twelve-month period, CollabRx reported revenues of $415,000, with net losses of ($4.3 million).
“We expect that this merger will dramatically speed up our growth,” said Seamus Lagan, CEO of Medytox Solutions, Inc. “Furthermore, the addition of CollabRx adds great depth to our company and places Medytox among the most elite, most innovative healthcare enterprises operating in the industry today. Together, we will show the world how state-of-the-art technology and vertical integration can improve health outcomes, and return value to shareholders in the process.”
Thomas Mika, CEO of CollabRx, said: “I cannot be more enthusiastic about this outcome for all CollabRx stakeholders, including our shareholders, customers, team members and advisors. CollabRx will continue its mission to better inform decision-making in cancer within a high-growth, profit-oriented company, while being able to support several exciting Medytox initiatives in precision medicine.”
Following the merger, Seamus Lagan will be CEO of the combined company. Thomas Mika and Dr. Paul Billings will be appointed to the combined company’s seven-member board, which will include the five current directors of Medytox. Mr. Mika will serve as Executive Chairman, as well as CEO of CollabRx, Inc., which will operate as a wholly-owned subsidiary of the combined companies.
Aegis Capital Corp served as exclusive financial advisor for CollabRx, Inc. and Goodwin Procter, LLP acted as legal advisor. Akerman LLP acted as legal advisor to Medytox Solutions, Inc.
