The trend in recent years towards overall market consolidation continued in the past 12 months with many of the larger medical imaging companies gobbling up smaller niche players left and right. GE Medical Systems (GEMS of Waukesha, Wis.) was far and away the biggest acquirer, but nearly all of the major imaging companies had some kind of news this year.
Despite the high number of acquisitions this year, unpredictable market conditions left a surprising number of proposed deals on the launching pad as stock prices fluctuated and skiddish investors voiced concerns loudly. There were some logical combinations and some very surprising deals to keep market watchers on their toes throughout the year.
October 1999
October starts with Patriot Medical Technologies Inc. (Nashville, Tenn.) closing on its second major acquisition of 1999 by purchasing Innovative Medical Solutions Inc. (Tustin, Calif.) for an undisclosed amount. In March 1999, Patriot acquired Novare Services Inc. (Cincinnati) … Siemens Medical Systems Inc. (Iselin, N.J.) teams up with Epix Medical Inc. (Cambridge, Mass.) and Mallinckrodt Inc. (St. Louis) to collaborate on development of contrast-based cardiovascular MRI technologies … DuPont Pharmaceuticals Co. (North Billerica, Mass.) acquires the outstanding shares of ImaRx Pharmaceutical Corp. (Tucson, Ariz.), maker of the Definity ultrasound contrast agent.
North American Scientific Inc. (Chatsworth, Calif.) and Theseus Imaging Corp. (Boston) sign a merger agreement contingent upon the progress of the radiopharmaceutical Apomate … Mobile imaging services are growing in popularity and that trend is confirmed when Alliance Imaging Inc. (Anaheim, Calif.) is acquired by an affiliate of Kohlberg Kravis Roberts and Co. LP (KKR) for $56 per share … Contrast agent developers Palatin Technologies Inc. (Princeton, N.J.) and Molecular Biosystems Inc. (MBI of San Diego) sign a stock-for-stock merger agreement for MBI shareholders to receive 0.525 shares of Palatin common stock for each share of MBI stock. The deal would later be called off … Colorado Medtech Inc. (Boulder, Colo.) completes its acquisition of ultrasound products maker Civco Medical Instruments Co. Inc. (Kalona, Iowa) in a stock-for-stock transaction … Misonix Inc. (Farmingdale, N.Y.) acquires a 51 percent stake in ultrasound refurbishing specialist Sonora Medical Systems Inc. (Longmont, Colo.) for $1.35 million.
December 1999
The annual meeting of the Radiological Society of North America (RSNA of Chicago) produces a host of merger and alliance news with GEMS leading the charge. First on the list is a three-year deal for GEMS to label, sell and service computed radiography (CR) systems from Agfa Corp. (Ridgefield Park, N.J.). Next, OEC Medical Systems Inc. (Salt Lake City) shareholders give final approval to its acquisition by GEMS. And lastly, GEMS announces an agreement to acquire Mecon Inc. (San Ramon, Calif.), a provider of Internet-based benchmarking and cost management solutions for healthcare systems … Also at RSNA, Eastman Kodak Co. (Rochester, N.Y.) dives into the digital radiography market under an agreement with Direct Radiography Corp. (DRC of Newark, Del.), a wholly owned subsidiary of Hologic Inc. (Bedford, Mass.) to assemble and sell DR systems. Analogic Corp. (Peabody, Mass.) and Fisher Imaging (Denver) are also involved in the deal … The Northlands heat up in December when monitor manufacturer Image Systems Corp. (Minnetonka, Minn.) unveils plans to acquire the Imaging Technologies division (Plymouth, Minn.) of Nortech Systems (Wayzata, Minn.). The short-lived deal is later called off in January … Image capture company Dalsa Corp. (Waterloo, Ontario) expands with a deal to buy MedOptics Corp. (Tucson, Ariz.) for $4.5 million. MedOptics designs digital X-ray medical imaging cameras for high resolution and small field-of-view radiographic applications, such as breast biopsies … DeJarnette Research Systems Inc. (Towson, Md.) puts the brakes on its proposed acquisition of RIS developer Swearingen Software Inc. (Houston) … CAD technology developer Qualia Computing Inc. (Beavercreek, Ohio) strikes a partnership with CADx Medical Systems Inc. (Laval, Quebec, Canada), giving CADx worldwide exclusive rights to commercialize the Second Look product … Late in the month, Acuson Corp. (Mountain View, Calif.) closes on its acquisition of Ecton Inc. (Plymouth Meeting, Pa.), giving Acuson a low-end, portable, all-digital phased array echocardiography platform.
January 2000
Instrumentarium Oy (Helsinki) leads off the year with a definitive agreement to acquire the surgical imaging companies of Ziehm GmbH (Nurenberg, Germany) … Esaote S.p.A. (Genoa, Italy) and Hitachi Medical Corp. (Twinsburg, Ohio) team up on development of ultrasound products in specific global markets … On the Intensity Modulated Radiation Therapy front, GEMS and Varian Medical Systems (Palo Alto, Calif.) agree to collaborate on information technology and product development to integrate diagnostic and radiation therapy systems for improved cancer management. The deal also makes Varian the exclusive distributor of GEMS’ CT, nuclear medicine and PET (positron emission tomography) products to radiation oncology customers in North America … Del Global Technologies Corp. (Valhalla, N.Y.) looks to expand in the European market and acquires 19 percent of Italian imaging equipment vendor Villa Sistemi Medicali S.p.A. (Milan, Italy) … North American Imaging Inc. (NAI of Camarillo, Calif.) moves to solidify its relationship with Aspect Electronics Inc. (Auburn, Calif.) through NAI’s acquisition of the DICOM connectivity specialist … DuPont Pharma Inc. (Mississauga, Ontario, Canada), the Canadian subsidiary of DuPont Pharmaceuticals (Wilmington, Del.), signs a letter of intent to acquire two radiopharmacies from Mallinckrodt Canada (Mississauga, Ontario) for an undisclosed amount.
February 2000
In a massive restructuring effort, parent company Thermo Electron Corp. (Waltham, Mass.) decides to put Trex Medical Corp. (Danbury, Conn.) up for sale, along with a host of other subsidiaries. It would be late summer before Trex announces a possible buyer in Hologic … Marconi Medical Systems (Highland Heights, Ohio) finds a new supplier of IMRT products in Nomos Corp. (Sewickley, Pa.). The deal replaces a previous agreement Marconi had with Varian, which ended when Varian teamed up with GEMS the month before … Sonus Pharmaceuticals Inc. (Bothell, Wash.) provides its U.S. distribution partner, Abbott Laboratories (Abbott Park, Ill.), with an option to exit the companies’ existing marketing agreement for the EchoGen contrast agent … Shareholders at Mecon on Feb. 11 approve the proposal to become a wholly-owned subsidiary of GEMS … Nortech Systems finds another possible buyer for its Imaging Technologies division in Computron Display Systems (Prospect, Ill.).
March 2000
March comes in like a lion as a growing battle between Eclipsys Corp. (Delray Beach, Fla.) and Shared Medical Systems (SMS of Malvern, Pa.) comes to a head when Eclipsys publicly offers $2 billion for the takeover of its larger competitor. SMS basically ignores the offer, but that’s just the beginning of the story … GEMS goes overseas and signs a pact to pick up Hungarian radiology and fluoroscopy equipment maker Medicor R?ntgen (Budapest) … Image storage equipment developer Rorke Data Inc. (Eden Prairie, Minn.) agrees to be acquired by computer components firm Bell Microproducts Inc. (San Jose, Calif.) … Surgi-Vision Inc. (Columbia, Md.) gets a boost through a marketing and distribution pact with GEMS to distribute Surgi-Vision’s esophageal MRI coil with its MRI scanners. GEMS agrees to use the MRI coil primarily with the GE Signa CV/i cardiac MRI scanner … Palatin halts its proposed takeover of MBI when a deadline applies the needed pressure … The newly christened GE OEC Medical Systems Inc. (Salt Lake City) partners with image-guided surgery systems provider Visualization Technology Inc. (Wilmington, Mass.) to jointly develop intraoperative computerized navigation solutions for image-guided surgery applications … On a similar front, Smith & Nephew Inc. (Memphis, Tenn.) announces a strategic alliance with Medtronic Surgical Navigation Technologies (Minneapolis) to market, develop and sell image-guided surgery products for orthopedic procedures. According to the proposal, Smith & Nephew will market Medtronic’s fluoroscopic image-guided systems for orthopedic trauma and total joint surgery. Medtronic retains all image-guided applications for spinal and neuro/cranial procedures … Agfa-Gevaert Group (Mortsel, Belgium) keeps things close to the home office and signs a letter of intent to purchase an equity stake in European RIS software developer Quadrat N.V. (Deurle, Belgium) … The end of March sees the formation of the Global Healthcare Exchange, an Internet-based purchasing initiative including Johnson & Johnson (New Brunswick, N.J.), GEMS, Baxter International Inc. (Deerfield, Ill.), Abbott Laboratories and Medtronic Inc. (Minneapolis) … At the BIO2000 conference in Boston, Epix Medical Inc. (Cambridge, Mass.) teams up with Vital Images Inc. (Plymouth, Minn.) and GEMS for the development of future contrast-enhanced cardiovascular MRI products.
April 2000
The big surprise in April is Neoforma.com’s (Santa Clara, Calif.) proposed acquisition of Eclipsys for $948 million in stock and HealthVision Inc. (Irving, Texas) for $422 million. The deal is expected to bring to a close to the ongoing battle between Eclipsys and Shared Medical Systems that began in March — until the Neoforma.com deal collapses in June due to Neoforma’s ailing stock price … Agfa acquires the rights to two cine film lines which it manufactures for GE Marquette Medical Systems (Milwaukee) … Global financial services company Citigroup (New York) reaches a deal to purchase equipment financing company Copelco Capital Inc. (Mahwah, N.J.) from multinational conglomerate Itochu International Inc. (Tokyo) … Philips Medical Systems North America (Shelton, Conn.) agrees to work more closely with imaging products distributor Diagnostic Imaging Inc. (DI of Jacksonville, Fla.) on product sales and service … AmeriSource Health Corp. (Malvern, Pa.), Cardinal Health Inc. (Dublin, Ohio), Fisher Scientific International Inc. (Hampton, N.H.), McKessonHBOC Inc. (San Francisco) and Owens & Minor Inc. (Richmond, Va.) agree to form an online purchasing initiative similar to the Global Healthcare Exchange … Digital radiography firm Swissray International Inc. (New York) inks a strategic business partnership with StorComm Inc. (Jacksonville, Fla.) to allow both companies to offer combined product offerings to their customers … Computerized Thermal Imaging Inc. (CTI of Layton, Utah) beefs up its imaging workstation offerings with the acquisition of Bales Scientific Inc. (San Francisco) … Del Global increases its ownership in Villa Sistemi Medicali to 80 percent.
May 2000
Siemens Medical Engineering Group (Erlangen, Germany) unveils plans to shell out $2.1 billion for the acquisition of Shared Medical Systems. The deal would later collapse … Hologic subsidiary Direct Radiography Corp. makes a strong move toward marketing its DR products as a retrofit or upgrade product by unveiling plans for a master distributor program specifically for retrofit products. DRC names imaging tube and components supplier North American Imaging Inc. (NAI of Camarillo, Calif.) as the first master distributor … The ongoing legal dispute between ultrasound contrast agent developers and marketers Sonus, Molecular Biosystems Inc. (MBI of San Diego) Nycomed Imaging AS (Buckinghamshire, England) and Mallinckrodt reaches a tentative settlement … Medrad Inc. (Indianola, Pa.) broadens its product base into patient monitoring with the acquisition of two product lines from Magnetic Resonance Equipment Corp. (Bay Shore, N.Y.) … After considering several other options, imaging center operator US Diagnostic Inc. (West Palm Beach, Fla.) approves a restructuring plan which — in the company’s words — “contemplates the sale of all or substantially all of its imaging centers.” … Ultrasound developer Misonix pays $1.4 million to increase its stake in Sonora to 90 percent after acquiring 51 percent of Sonora in late 1999 … ReMedPar (Goodlettsville, Tenn.) signs on to become the second “master distributor” in DRC’s distribution network for its retrofit DR systems … Speech recognition is the phrase that pays for Royal Philips Electronics (Best, The Netherlands) as it makes a tender offer for 60 percent of transcription firm MedQuist Inc. (Marlton, N.J.) for $51 per share. As part of the deal, the firms enter into a license agreement for the joint development and implementation of speech recognition technology … Agilent Technologies Inc. (Palo Alto, Calif.) looks to expand its cardiology product line with the acquisition of Zymed Inc. (Oxnard, Calif.), a provider of cardiac analysis software.
June 2000
Cedara Software Corp. (Mississauga, Ontario, Canada) acquires connectivity specialist Dicomit DICOM Information Technologies Corp. (Markham, Ontario) in a $15.3 million stock buy … The proposed merger between Neoforma.com and Eclipsys goes south in the wake of Neoforma.com’s restructuring plan. The companies opt for a co-marketing and distribution deal instead … Healthcare products supplier PSS World Medical Inc. (PSS of Jacksonville, Fla.) agrees to be acquired by Fisher Scientific International (Hampton, N.H.) for $840 million. Once again, this deal would later be nixed in light of Fisher’s plummeting stock value … Agfa gets into the DR game and strikes a deal with Canon Medical Systems (Irvine, Calif.) to label and sell Canon DR products … Both GEMS and Siemens Medical Systems Inc.’s Nuclear Medicine Group (Hoffman Estates, Ill.) take an equity stake in Imarad Imaging Systems Ltd. (Rehovot, Israel), a producer of cadmium zinc telluride which is used
in nuclear medicine detectors … In an effort to bolster its healthcare offerings, diversified manufacturing and service company Tyco International Ltd. (Pembroke, Bermuda) moves to acquire Mallinckrodt for $4.2 billion … Six months after it was created through a management buyout in December 1999, Imco Technologies Corp. (Pewaukee, Wis.) — formerly the U.S. operations of Rogan Medical Systems BV (Zeist, The Netherlands) — completes the acquisition of Information Technology Products Inc. (ITP of West Chicago, Ill.), a privately held medical software company.
July 2000
Philips Medical Systems North America bolsters its Inturis image management system through its acquisition of the CardioLogica cardiology information and image management software from the former Cardiovascular Computer Systems Inc. (Milwaukee) … Imaging agent developer Cytogen Corp. (Princeton, N.J.) signs on to acquire up-and-coming MRI agent maker Advanced Magnetics Inc. (Cambridge, Mass.) for $60 million in Cytogen stock, but pulls the plug on the deal a month later … US Diagnostic nets shareholder approval to sell all of its imaging centers and reinvest into a new business.
August 2000
Hologic ends months of speculation with the announcement that it plans to acquire Trex Medical Corp. for approximately $55 million … Jomed N.V. (Beringen, Switzerland) and intravascular ultrasound developer EndoSonics Corp. (Rancho Cordova, Calif.) reach a definitive agreement for Jomed to acquire all of EndoSonics’ outstanding stock for $11 per share, or approximately $205 million … Agfa-Gevaert Group finalizes its majority equity stake in PACS software developer Quadrat … US Diagnostic signs a deal to sell 14 medical imaging centers to Syncor International’s (Woodland Hills, Calif.) subsidiary, Comprehensive Medical Imaging Inc., in California and Florida … High-field MRI is the goal when GEMS acquires the clinical operations of Magnex Scientific Ltd. (Oxford, U.K.) … Cytogen and Advanced Magnetics mutually agree to pull the plug on the proposed $60 million acquisition of Advanced Magnetics.
September 2000
Imaging services provider Radiologix Inc. (Dallas) proposes the sale of 90 percent of its stock to private investment firm Saunders, Karp & Megrue (New York) in a recapitalization deal valuing Radiologix at $377 million … Sonora acquires CraMar Technologies (Westminister, Colo.), a stress echocardiography support specialist … PSS and Fisher Scientific mutually agree to terminate their merger … GEMS buys clinical depot repair service company OneSource Services Inc. (Cleveland) … and Siemens closes out the month with its proposed acquisiton of ultrasound designer and manufacturer Acuson Corp. for $23 per share or $700 million …
What lies ahead for the rest of this year and beyond? No doubt the speculation and negotiations already are under way.
