MILWAUKEE, Wisconsin — Health information technology company Merge Healthcare’s stock nosedived 13 percent Friday after the company announced plans to sell an additional 9 million shares.
Merge plans to price the offering, aimed at “select institutional investors,” at $3 per share, according to a statement from the company. Not coincidentally, the company’s share price fell to $3.01 midday Friday before rebounding a bit to close at $3.12. Its previous-day closing price was $3.60.
Merge expects proceeds of the sale to net about $25 million, more than two-thirds of which would be used to pay down debt, according to a regulatory filing. The rest of the proceeds would go toward “general corporate purposes,” including working capital, the filing said.
The Power Behind Enterprise EHR Software for Large Healthcare Systems
Enterprise EHR boosts scalability, interoperability, and governance for large healthcare systems.
The company made news earlier this month when two former executives settled accounting fraud charges filed by the Securities and Exchange Commission. The company’s former chief executive and chief financial officer agreed to pay about $900,000 combined without admitting to any allegations of wrongdoing.
On the year, the company’s stock has more than doubled after opening at $1.28 on January 2. In August, Merge acquired an imaging company for $22 million after a June acquisition of a clinical trials software firm for an undisclosed sum.