Complaints Challenge Sufficiency of Disclosures in Proposed Stryker-Vocera Merger

A pair of complaints, one filed in Wilmington, Delaware and the other filed in San Jose, California, have accused Vocera Communications Inc. of omitting material information in connection with its proposed acquisition by Stryker Corporation, a multinational medical technologies company headquartered in Kalamazoo, Michigan. The shareholders explain that various aspects of Vocera’s official solicitation statement are deficient, allegedly preventing them from making a fully informed decision about whether to vote for the proposed transaction.

The Delaware complaint reprints the announcement made on January 6, describing that Stryker would purchase Vocera, a company that purportedly provides “clinical communication and workflow solutions that help protect and connect team members, increase operational efficiency, enhance quality of care and safety, and humanize the healthcare experience,” for $79.25 per share of outstanding common stock.

The complaint against Vocera, its CEO and chairman of the board, as well as its board members, claims that the solicitation statement omits material information regarding the company’s financial projections. In particular, it allegedly fails to disclose line items used to calculate the projections and “a reconciliation of all non-GAAP to GAAP metrics.” The filing explains that these omissions are material because they aid shareholders’ understanding and assessment of the financial analyses performed by the company’s advisor Evercore in support of its fairness opinion.  

Next, the lawsuit says that several of Evercore’s analyses fail to disclose underlying inputs, like the company’s terminal values and the number of fully diluted shares outstanding as used in its Discounted Cash Flow Analysis. Additionally, the California complaint urges that the sales process through which the parties reached the proposed deal was flawed itself and that director conflicts may prevent shareholders from obtaining a fair deal.

The Delaware complaint fingers the defendants for omitting the information “knowingly or with deliberate recklessness,” thereby causing the solicitation statement “to be materially incomplete and misleading.” For relief, the filing requests that the court halt the proposed merger until an adequate solicitation statement is filed and award the plaintiffs his attorneys’ fees and costs.

The Delaware plaintiff is represented by Rigrodsky Law P.A. and the California plaintiff by Brodsky & Smith.