ADAC Laboratories’ exit from the healthcare information systems market appears to be at hand. The Milpitas, CA-based vendor announced today an agreement to sell its HealthCare Information Systems unit to Cerner for $6 million in cash.
ADAC two weeks ago announced its decision to divest the underperforming HCIS unit in a move to focus on its core nuclear medicine, PET, and radiation therapy businesses. As part of that decision, the vendor signed a letter of intent to sell its cardiology information systems group to Camtronics Medical Systems.
ADAC and Cerner expect to complete their deal next month, pending customary closing conditions and regulatory approval. For Cerner, the deal allows the Kansas City-based firm to expand its presence in the radiology market, according to chairman and CEO Neal Patterson.
Cerner declined to provide further details on its planned acquisition of ADAC HCIS until the deal closes. Cerner will certainly have some interesting product integration decisions, with ADAC offering its QuadRIS radiology information system and Envoi integrated RIS/PACS product.
Cerner believes the acquisition will not dilute earnings in 2001 and will contribute positively to earnings in 2002, according to Patterson. For its part, ADAC anticipates that it will take a charge of approximately $7 million (net of tax) in its fourth fiscal quarter (end-October 2), as a result of the divestiture. This charge is in addition to the company's previously announced $2 million charge relating to the sale of its cardiology systems group to Camtronics.
ADAC expects to treat the HCIS business as a discontinued operation and to report an estimated loss for the fourth quarter of approximately 5¢ per share for HCIS, an amount separate from the results of its continuing operations.
By Erik L. Ridley
AuntMinnie.com staff writer
October 24, 2000
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ADAC plans to sell HCIS unit as Q4 results sag, October 10, 2000
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