By Ha'aretz Staff SHL Telemedicine of Tel Aviv will acquire the American Raytel Medical Corporation in a $31 million deal, SHL announced yesterday. The merger will give SHL a footing in the U.S., a market it has not yet entered.
SHL, a developer and marketer of telemedicine devices and provider of telemedicine services, yesterday announced the signing of a definitive merger agreement pursuant to which SHL will acquire Raytel Medical Corporation, a leading U.S. provider of remote cardiac monitoring and testing. According to the terms of the agreement, a wholly-owned subsidiary of SHL will put forward a tender offer for all of Raytel's outstanding shares at a price of $10.25 per share in cash, for a total of approximately $31.1 million, which represents a premium of approximately 28 percent over the closing price on February 7, 2002. Following completion of the tender offer, the SHL subsidiary will be merged with Raytel.
SHL was founded in 1987, and is listed on SWX New Market, which is the segment of the Swiss Stock Exchange for fast-growing companies. SHL holds 19.9 percent of the shares in the joint venture Philips HeartCare Telemedicine Services Europe B.V. In 2000, SHL reported revenues of $19.5 million and a profit of $1.2 million. In the first nine months of 2001, SHL achieved revenues of $22.0 million and a profit of $12.3 million. SHL stated that preliminary financial results for fiscal year 2001 are expected to meet or exceed revenue and profitability forecasts of the investment community. SHL is best known in Israel for its subsidiary, Shahal Israel, which provides home telemedicine services to subscribers at home or elsewhere.
Raytel, incorporated in 1981, is a provider of healthcare services, focusing on the needs of patients with cardiovascular disease. It is considered one of the leading providers of remote pacemaker monitoring services in the United States, and provides other cardiac diagnostic services utilizing trans-telephonic monitoring technologies. Raytel also owns and operates a number of outpatient diagnostic imaging facilities and cardiovascular and nuclear cardiology diagnostic service facilities. Raytel's revenues for the year ended September 30, 2001 totaled $71.3 million and the company recorded a loss for the year from continuing operations of $13.3 million. This loss was due to the provision for payments of $14.1 million in connection with the June 2001 settlement of claims made by the U.S. government in connection with the company's past pacemaker operations and Medicare billing practices.
Yoram Alroy, chairman and CEO of SHL said yesterday: "We are very pleased to start 2002 by announcing our acquisition of Raytel and our entry into the attractive U.S. market."