No deal: CardioNet cancels Biotel acquisition

By Brian Dolan
Share

CardioNet monitorIt's been a tough couple of months for wireless arrhythmia monitoring company CardioNet: The company has terminated its plans to acquire Minnesota-based Biotel, which has its own cardiac arrhythmia monitoring business, an experienced design and development team plus manufacturing capabilities that were set to support CardioNet's growing business. The deal was originally pegged at $14 million but, according to a press release from Biotel, CardioNet has pulled the plug.

While Biotel does not mention CardioNet's latest hiccup in its press release, we wonder if the cancelled deal has anything to do with the recent reimbursement news from Highmark CMS: This past Sunday CardioNet confirmed recent analyst speculation that Highmark CMS plans to cut its reimbursement rate for MCOT services substantially from $1,234.07 to just over $700. 

Biotel's press release states that CardioNet had called the deal off because it said Biotel had failed to comply with the terms of the agreement. Biotel President and CEO Steve Springrose weighed in:

"It is unfortunate that CardioNet took this action. Biotel has developed significant new products in wireless MCT and event recorder applications. These products are of significant value to arrhythmia service organizations, and Biotel believes these products are cost effective and well positioned for the current medical reimbursement climate. Biotel has worked to build its shareholder value by expanding its range of products and services. Biotel will continue to position these new wireless products to maximize growth and opportunities going forward."

CardioNet originally said it was particularly interested in Biotel's Agility Centralized Research Services, which is based in Chicago, and provides ECG monitoring services to the medical device and pharma industries as well as to contract research and academic research organizations.

CardioNet's last big acquisition was PDSHeart in 2007. The financial terms of that deal were not disclosed but the Biotel acquisition is tiny in comparison.

For more on the terminated acquisition, read Biotel's statement after the jump.

CardioNet Terminates Merger With Biotel

MINNEAPOLIS, July 14 /PRNewswire-FirstCall/ -- Biotel Inc. (OTC Bulletin Board: BTEL) today announced that CardioNet has advised Biotel that it is terminating the Merger Agreement with Biotel due to a failure of Biotel to comply with the terms of the agreement. Biotel believes it has complied with all terms of the agreement and that CardioNet's claim is without merit and inconsistent with CardioNet's representations to Biotel. Biotel is considering its legal options.

Biotel President and CEO Steve Springrose said: "It is unfortunate that CardioNet took this action. Biotel has developed significant new products in wireless MCT and event recorder applications. These products are of significant value to arrhythmia service organizations, and Biotel believes these products are cost effective and well positioned for the current medical reimbursement climate. Biotel has worked to build its shareholder value by expanding its range of products and services. Biotel will continue to position these new wireless products to maximize growth and opportunities going forward."

Biotel supplies completed medical devices and clinical research services to medical companies including

ECG diagnostic products
wireless MCT and event recorders, Holter recorders,
tissue management devices, and
24/7 clinical ECG research services

SOURCE Biotel Inc.