etrials, a 1999 startup with some 50 employees and financed in part by Capital Strategies of Raleigh, is merging.

etrials announced this morning that it had reached a “definitive agreement” to merge with Araccel Corporation of Horsham, PA.

Pending shareholder approval, the new company will be called etrials Worldwide, Inc.

John Cline, president of etrials, will be the chief executive officer of the joint operation. Fred Nazem, chairman of Araccel, is to be the combined firm’s executive chairman.

Both companies are focused on the electronic clinical trials market.

Araccel has an office in Cary as well as another one in the United Kingdom.

“This merger provides etrials customers an immediate base of operations in Europe,” Cline said in a statement, “and Araccel customers with additional key products and technologies.

“We believe this merger is the logical next step towards our long-held goal of building a truly great company that can lead the market in end-to-end eClinical solutions for clinical trials.”

The merger is expected to close by Nov. 30.

Capital Strategies is one of the investors in privately held etrials, which has raised $7 million in venture capital.

The company recently announced a 177 percent revenue increase through the first two quarters of this year over the same period in 2001.The growth includes a 57 percent increase in revenues in the second quarter 2002 over the first quarter 2002, etrials said, and a jump of more than 146 percent over the same quarter one year ago.

In addition to sustaining growth, etrials has recently launched new services, including a new electronic patient diary offering called QuickStudy Log at the Drug Information Association meeting in June. QuickStudy Log collects quantitative patient data and quality-of-life information during a clinical trial and, according to etrials, is the first electronic patient diary in the industry to allow mid-study changes without having to redeploy the handheld devices.