Minnesota’s Biotel says deal off with CardioNet acquisition; shares plummet

MINNEAPOLIS, Minnesota — CardioNet has canceled its acquisition with Biotel for violating terms of the agreement and Biotel said it is considering legal options.

Biotel’s shares had dropped by more than half by early Tuesday afternoon. Chief Executive Steve Springrose said the company would now look to sell its products to companies that were interested in using them before the CardioNet acquisition agreement. He would not say what section of the agreement CardioNet said Biotel had violated, only that “neither we nor CardioNet considered this to be an issue before (Monday).”

The two companies announced the acquisition in April. CardioNet, a Pennsylvania company that makes wireless devices for cardiac arrhythmias, billed the acquisition as a way to get into the cardiac clinical research services business. Biotel is a medical devices and clinical research services company with products that include wireless electrocardiogram devices. CardioNet had agreed to pay Biotel $4.82 per share in cash — worth about $14 million — and the deal included Biotel subsidiary Agility Centralized Research Services.

Springrose said the company would elaborate more on any legal complaint it would file.

Executives from CardioNet had not yet returned phone calls.