A Medical Device Daily
Agfa-Gevaert (Mortsel, Belgium) reported that it has agreed to acquire all of the shares of Heartlab (Westerly, Rhode Island), a supplier of image and information networks for cardiology.
The purchase price will be $132.5 million in cash at closing, subject to regulatory approval.
Agfa said that, combined with other recent acquisitions, the purchase strengthens its position in healthcare information technology (IT), enhancing its cardiology portfolio. Additionally, the purchase expands Agfa’s presence in U.S. hospitals. Agfa estimates that cardiovascular conditions account for one-quarter of all U.S. hospital admissions.
“The combination of Heartlab and Agfa will result in substantial growth, based on an even more competitive solutions portfolio and our presence and reputations in leading hospitals around the world,” said Ludo Verhoeven, Agfa’s president and CEO. He added that it “fits well with [Agfa’s] recent acquisitions.”
Heartlab, founded in 1994, says it has pioneered the creation of industry standards and the development of clinical products that improve management of cardiovascular disease.
Heartlab last year reported $38.3 million in revenue and EBITDA of $5.4 million. Its customers, it says, include leading North American academic and research cardiovascular centers.
Agfa and Heartlab have been collaborating since December 2003, within a distribution agreement for Agfa’s Impax for Cardiology solution. The joint solution allows for the integration of radiology and cardiology, the two most image-intensive departments within hospitals, incorporating the clinical technology and diagnostic tools of Heartlab with Agfa’s integration and workflow expertise.
Philippe Houssiau, president of Agfa’s HealthCare group, said that Heartlab, with its specialization “in cardiology and its market access in the U.S., complements Agfa perfectly . . . [I]t suits our holistic approach . . . whereby we provide integrated hospital-wide solutions and in-depth clinical know-how.”
Robert Petrocelli, Heartlab CEO and co-founder, said, “Joining Agfa offers Heartlab new opportunities in global markets, and thereby strengthens the portfolio and benefits our customers and their patients.”
Petrocelli will manage Agfa’s Cardiology business.
Agfa’s HealthCare business supplies systems for the capturing, processing and managing of diagnostic images and with IT solutions that integrate imaging workflow into the overall hospital operations. Agfa also is active in healthcare IT systems.
Heartlab develops application software and integrates systems using industry-standard computer hardware. Heartlab’s Encompass network enables rapid access to imaging exam and report information. Encompass networks are installed in more than 250 cardiovascular care centers.
In another deal in the cardiovascular sector, Boston Scientific (Natick, Massachusetts) reported that it has exercised its option to acquire CryoVascular Systems (Los Gatos, California). Terms were not disclosed.
Boston Scientific distributes CryoVascular’s angioplasty device, the PolarCath Dilatation System, to treat atherosclerotic disease of the legs and other peripheral arteries.
Jeff Gold, CEO of CryoVascular, cited Boston Scientific’s “outstanding job of introducing this exciting new technology into a very competitive marketplace. The entire CryoVascular team is looking forward to expanding the use of CryoPlasty therapy as part of Boston Scientific.”
The PolarCath system uses liquid nitrous oxide to provide precise cooling of the diseased artery during balloon angioplasty, a procedure known as CryoPlasty. The system is designed to revascularize the artery and reduce post-procedure restenosis. The repeat procedure rate for patients treated with current balloon angioplasty and stent technology of the femoral-popliteal arteries is reported to be as high as 30% to 40%.
“Boston Scientific is continually searching for innovative technologies to treat peripheral vascular disease,” said Paul LaViolette, chief operating officer. “We have been impressed by the strong reception of the CryoPlasty procedure among physicians and look forward to continuing to offer this treatment option as part of our peripheral portfolio.”
In other dealmaking news:
• Invacare (Elyria, Ohio) reported acquiring UK-based Medical Support Systems Holdings (MSS; Cardiff, Wales). Terms of the cash purchase were not disclosed.
MSS manufactures foam pressure-reducing products for healthcare. Its portfolio of products includes mattres-ses, overlays and cushions for both armchairs and wheelchairs.
Invacare said that MSS would continue to operate independently with its existing management and remain focused on its core business.
Invacare manufactures home and long-term care products. It has 6,100 associates and markets its products in 80 countries.
• Medical Home Products (St. Petersburg, Florida), a provider of medical self-test kits and diabetics supplies, said that it has acquired Strictly Diabetics (Lauderhill, Florida), a Medicare durable medical equipment company.
Paul Mathis, president and CEO of Medical Home Products, called the purchase “the first step in our strategy to grow our business through a combination of organic expansion and aggressive acquisitions along our established product lines and customer base . . . Our integrated fulfillment and call center operations, along with our combined purchasing power, provides a significant increase in our revenues as well as enables us to achieve further cost reductions while increasing our margins.”
Medical Home Products is publicly traded on the OTC under the symbol MHPT.
• Omni Medical Holdings (Rapid City, South Dakota) reported acquiring Plum Creek Outpatient (PCO) and certain assets of Stat Anesthesia (both Chicago) in a stock transaction. PCO and Stat, related companies, provide office-based anesthesiology throughout the Midwest.
Revenue of PCO/Stat was about $3.6 million in 2004. Forward 12-month estimates are over $5 million in revenue. Arthur Lyons, Omni CEO, said the deal concludes “18 months of effort . . . We are projecting forward 12-month consolidated revenue of $8.5 million and EBITDA of $1.5 million.”
• The UAB Health System and HealthSouth (both Birmingham, Alabama) have signed a letter of intent for UAB Health System to buy HealthSouth’s acute-care hospital and surrounding property on 11th Avenue South in Birmingham. The letter includes an exclusive negotiation period.
David Hoidal, CEO of the UAB Health System, said that the acquisition would support UAB’s efforts “to meet the community need for high quality healthcare that is readily accessible.”
UAB and HealthSouth said they also are negotiating the sale of the professional office building, parking deck and several other facilities on the 17.5-acre site.
The UAB System includes the 908 licensed-bed UAB Hospital, the Callahan Eye Foundation Hospital at UAB, UAB Medical West, The Kirklin Clinic, The Kirklin Clinic at Acton Road, the Health Services Foundation, Viva Health, a network of neighborhood health centers and primary care programs in Montgomery, Tuscaloosa and Huntsville, Alabama.
HealthSouth is a major provider of healthcare services, operating outpatient surgery, diagnostic imaging and rehabilitative healthcare facilities.