With an eye on expanding its presence in cardiac CT, GE Medical Systems has agreed to acquire electron beam tomography (EBT) developer Imatron in a stock swap valued at approximately $200 million.
GE was attracted to Imatron primarily for the firm's experience in cardiac imaging, said Dow Wilson, general manager of global CT for GE of Waukesha, WI.
"Cardiology is really our main focus [with the acquisition]," he said. "For some of the other applications, our current product line does very well, and the investment here for us is a commitment to both the future of electron beam tomography as well as the future of multislice CT."
GE is also impressed with the South San Francisco, CA-based firm's distribution network in the cardiology market, which fits in well with GE's distribution strategy, Wilson told AuntMinnie.com. Product development plans will continue for both companies' CT product lines, with Imatron's EBT development focused primarily on cardiology applications, Wilson said.
"The [ultrafast CT] technology has outstanding temporal resolution, [offering] the ability to minimize motion artifacts and really capture high-speed applications, which of course, are most relevant in cardiology," Wilson said.
The deal would end Imatron's run as an independent trailblazer and crusader for the benefits of CT calcium scoring, a technology initially available only on Imatron electron beam CT scanners. The first company to participate in this market niche, Imatron's approach has gone on to achieve industry validation, with many CT vendors (including GE) featuring calcium scoring capabilities on their scanners today.
GE will be buying a company that has begun to gather financial momentum. Imatron posted record second-quarter revenues, and also shipped nine EBT scanners in its first quarter (traditionally its weakest). Despite an expected revenue and profit shortfall from recent developments and associated economic uncertainty, Imatron expects to record revenues of at least $71 million in 2001 and achieve profitability in its current fiscal year, according to the company. Imatron EBT scanners are currently in use at more than 150 major medical facilities and imaging centers around the world.
Although the ultimate fate of the Imatron brand has not yet been determined, it will be integrated into GE's global CT business. Imatron's manufacturing, development, sales, and service capabilities will also be retained, Wilson said.
The transaction, which is subject to regulatory and Imatron shareholder approvals as well as other customary conditions, is expected to close by the end of 2001. Each Imatron shareholder will receive $1.89 per share in GE stock, with the actual number of shares to be determined by the trading prices of GE stock for a period of time prior to the closing of the transaction. In connection with the definitive agreement, Imatron granted GE an option to acquire newly issued shares of common stock, representing 19.9% of Imatron's total outstanding shares, at the $1.89 per share transaction price.
Imatron shareholders representing 11% of the shares outstanding on a fully diluted basis have agreed, among other things, to vote their shares in favor of the proposed transaction, according to the vendors. Imatron's board of directors has unanimously approved the transaction.
By Erik L. RidleyAuntMinnie.com staff writer
September 24, 2001
Related Reading
Imatron turns in record revenues, August 14, 2001
Imatron gets first C-300 customer, July 30, 2001
Positron gets loan from Imatron, July 24, 2001
GE installs 1,000th LightSpeed, June 29, 2001
GE rolls out line of hybrid scanners, June 25, 2001
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