A Diagnostics & Imaging

Vital Signs (Totowa, New Jersey) reported the acquisitions of a sleep diagnostic company and a durable equipment supplier in its Sleep Segment business unit.

Sleep Services of America (SSA), a majority owned Vital Signs subsidiary, acquired the assets of Southern Sleep Technologies and Southern Home Respiratory Care (both Macon, Georgia)

Southern Sleep Technologies primarily provides sleep diagnostic services in both free standing and hospital owned sleep laboratories, and Southern Home Respiratory Care is a provider of CPAP equipment to sleep apnea patients.

Southern Sleep and Southern Home Respiratory had revenue of $2.1 million in 2006 and the acquisition costs are about $3 million. Vital Signs now owns 73% of SSA, with the Johns Hopkins Health System Corp. (Baltimore) owning 26%.

John Mathias, president of SSA said, "These acquisitions allow SSA to expand its geographic coverage in the greater Atlanta area. This acquisition propels our strategy of providing the patient with a complete range of sleep services. By guiding patients through the diagnostic procedure, through the training and use of CPAP devices and through follow-up services, SSA is uniquely positioned to address the patient's sleep needs. We are excited that the founder and owner of the business will be staying with us to develop and improve the delivery of sleep diagnostic and therapeutic services."

Vital Signs and its subsidiaries make single-use medical products for the anesthesia, respiratory/critical care, sleep/ventilation and interventional cardiology/radiology markets

In other dealmaking news:

• Advanced Image Enhancement (AIE; Providence, Rhode Island), a provider of optimized image enhancement solutions for digital radiology, reported that the firm has entered into a licensing agreement with Hologic (Bedford, Massachusetts), a manufacturer of diagnostic and medical imaging systems for women's healthcare.

AIE will provide its image enhancement software for Hologic's SecureView diagnostic mammography workstations.

AIE's image enhancement software, which leverages signal processing technology originally developed from Navy research to locate undersea mines, is designed to enable physicians to extract more information from medical images. In 2005, AIE completed its second clinical pilot study utilizing its image enhancement technology on the Hologic digital mammography diagnostic workstation.

AIE received approval from the FDA in September 2006 to market the technology.

"This contract with Hologic, the world leader in digital mammography, clearly validates our product," said Michael Duarte, CEO and founder of AIE. "This is an important milestone for the company, as well as for the medical imaging community."

AIE's first product addresses the problems of visualizing subtle lesions in digital mammograms. Future applications of AIE technology include chest x-rays and orthopedics and other image modalities including ultrasound and MRI.

• Optimal Reading Services Group (Birmingham, Alabama), a provider of optimization services for radiology, said it has acquired International Radiology Group (IRG; Dallas) from AIM Holding. The transaction includes all of International Radiology Group's assets and businesses, including National Radiology Group, which has been providing remote radiology services for more than sixteen years. IRG's radiologists will also be joining the Optimal Readings team.

The acquisition of IRG adds 17 licensed radiologists and a centralized reading facility in Dallas servicing 33 additional states to Optimal Readings' optimization resources. The Dallas facility is staffed exclusively with U.S. board-certified radiologists.

Optimal Readings said it will continue to maintain its headquarters in Birmingham, Alabama with the dedicated Dallas reading center enabling the company to respond more fully and rapidly to radiology practices, hospitals, diagnostic image centers and physician practices across the U.S.