Imaging software developer Cedara Software has signed a deal to acquire PACS vendor eMed Technologies for $48 million in cash. If the union is completed, the Mississauga, Ontario-based imaging software supplier to OEMs would marry a PACS player that is noted for its presence in the imaging center and small-hospital market.
The acquisition builds on a relationship the two firms have shared since 1996, when eMed (then known as Access Radiology) began using Cedara's diagnostic workstation software. For Cedara, the deal offers a chance to capture greater market share and develop better product capabilities for its customers, CEO Abe Schwartz said in a statement. eMed CEO Mark Smith said that the deal will enhance its ability to introduce new products and allow for international expansion.
The acquisition would also bring Cedara direct access to the end-user market, a move aimed at spurring growth, said Jacques Cornet, vice president of marketing and customer operations. Cedara also believes that eMed's sizeable U.S. installed base provides a good opportunity for its sales force to promote Cedara's clinical applications and other image-management technologies.
In addition, the firm intends to utilize its global channel to promote eMed technology worldwide. Cedara has distributors in place in its North America, Europe, and Asian regions that would now be able to offer eMed products.
Cedara isn't concerned about the possibility of competing with its OEM partners, however.
"Our OEM (clients) are mostly large companies that focus on higher-tier segments of the market," Cornet said.
Burlington, MA-based eMed will become a wholly owned subsidiary of Cedara. eMed CEO Mark Smith will stay on with the company, and no material changes to the organization are anticipated, Cedara said.
Future product development activities between the firms will seek to ensure growth for the combined operation, Cornet said.
"We will definitely leverage both teams' expertise to bring additional value in the current offering to the end-users, as well as OEMs," he said.
Cedara said that eMed posted approximately $24 million in sales in its last fiscal year, adding that it comes with a clean balance sheet and a strong working-capital position. eMed has been consistently profitable over the last 24 months, according to Cedara.
The deal is expected to close within 30 days, following consent by eMed's shareholders and the satisfaction of customary closing conditions. Cedara said it expects to pay for the acquisition with a combination of its own cash reserves and bank financing. The companies will have a combined total of approximately 350 employees in the U.S. and Canada.
eMed Technologies began its corporate life in 1992 as teleradiology firm Access Radiology. In 1998, Access Radiology purchased PACS firm EMED from defense company Raytheon. The company changed its name to eMed Technologies in late 1999 to reflect its emphasis on Internet-based image management technology.
By Erik L. Ridley
AuntMinnie.com staff writer
September 15, 2004
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eMed adds Matrix orders, May 25, 2004
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