A Medical Device Daily
Eastman Kodak (Rochester, New York) reported entering into an agreement to acquire Orex Computed Radiography (Yokneam, Israel), a provider of compact computed radiography (CR) systems enabling the acquisition of patient X-ray images digitally, for about $50.5 million in cash.
Kodak said it expects Orex to add roughly $32 million to its 2005 revenue, reflecting about 10 months of Kodak ownership. The company anticipates the acquisition will be earnings neutral in 2005 and accretive thereafter. Orex's 2004 revenue was about $28 million.
The technology behind the hardware and software that make up Orex's small-format CR products have resulted in flexible compact systems for specialty markets, such as orthopedics, diagnostic imaging centers and dentistry. The company's systems also are used for in-room computed radiography needs throughout a medical facility — such as in emergency, pediatrics and intensive care departments — enabling medical staff to stay in contact with patients during the exam.
Orex reports to date almost 4,000 of its systems installed in the U.S., Europe, Japan, China and other parts of the world, with some 250 CR units sold to branches of the U.S. military.
The company has U.S. offices in Auburndale, Massachusetts.
Dan Kerpelman, president of Kodak's Health Imaging Group, said the purchase “is in strategic alignment with plans to market our digital medical imaging and information products to customers in specialty medical markets worldwide. By augmenting our own highly successful CR product line, we can provide a broader array of CR solutions to meet the needs of large and small practices alike.“
Marketing of Orex systems now will be supported by Kodak's resources.
“Kodak has the customer focus, the breadth of digital image capture, PACs and print solutions, an excellent track record in CR systems and the global resources to further enhance and better serve Orex existing and new customers in specialty markets like no one else can,“ said Hillel Bachrach, president and CEO of Orex. Computed radiography systems from Orex also are used by customers in another market Kodak serves — industrial non-destructive testing organizations, such as pipeline companies, foundries and aerospace manufacturers — offering industrial radiographers an easy digital solution to make image viewing and analysis more efficient.
Orex was founded in 1996 as Digident, with a focus on developing innovative CR solutions for general dental and orthodontist practices. In 2000, the company was renamed Orex Computerized Radiography to address medical applications for D-CR. Kodak's Health Imaging Group develops intelligent imaging products from analog to digital.
The agreement, subject to various standard approvals, is expected to close by the end of the first quarter.
In other dealmaking:
• Varian Medical Systems (Palo Alto, California) reported acquiring Sigma Micro Informatique Conseil (Toulose, France), a private supplier of information management software for medical and radiation oncology in cancer clinics and hospitals in France and other European nations, for about $13 million in cash.
Christopher Hanna, vice president for Varian's Oncology Information Systems business, called the purchase “a logical extension of Varian's product line that enables us to offer customers a more comprehensive information management solution, particularly in international markets . . . we believe the Sigma Micro will serve as an excellent complement to our more fully-featured VARiS Vision software for information and image management within integrated Varian treatment networks.“ It also adds development resources to Varian's Oncology Information Systems team, he said.
Hanna said Sigma Micro software has more than 90 installed systems, mostly in France with the balance in Europe, Asia and North Africa.
The acquisition enables Varian to provide French-speaking and other international clinics and hospitals with technology for managing and maintaining electronic health records for cancer patients receiving radiotherapy and/or chemotherapy. The Sigma Micro software supports billing in a variety of reimbursement schemes and works with equipment from multiple vendors, including Varian.
Sigma Micro General Manager Pierre Fragnac, PhD, one of the company's founders, said, “By being a part of Varian, we have the strongest possible platform for developing, marketing, servicing and supporting our technology.“
Sigma Micro has 19 employees who will continue in their present roles, working from the Toulouse facility.
Varian said it expects the acquisition to add annualized revenues of about $7 million and be neutral to earnings in the current fiscal year.
Varian is a leading manufacturer of integrated cancer therapy systems and a premier supplier of X-ray tubes and flat-panel digital subsystems for imaging in medical, scientific and industrial applications.
• PPD (Wilmington, North Carolina) said it agreed to acquire substantially all assets of the biomarker business of SurroMed (Menlo Park, California).
PPD will surrender its shares of SurroMed preferred stock, will assume $3.4 million of liabilities under capital leases and certain operating liabilities associated with SurroMed's biomarker business and will guarantee repayment of a portion of a SurroMed bank loan up to $1.5 million.
PPD acquired its shares of SurroMed stock in 2002 and 2003 for $29 million in cash, tangible assets and intellectual property. The company expects to have an after-tax gain of from $1.5 million to $3 million on the disposition of its SurroMed preferred stock.
The purchase will expand PPD's business by adding biomarker discovery and patient sample analysis to its services. SurroMed's technology enables analysis of patient samples for novel or known biomarkers in the presence or absence of a drug.
Gordon Ringold, PhD, SurroMed's chairman and CEO, said, “SurroMed has developed the premier biomarker discovery capability, and we believe that PPD will be able to leverage this business as part of its broader service offering for biotechnology and pharmaceutical companies.“ He added that the spin-off allows SurroMed “to concentrate . . . on the continued development of our nanotechnology and protein therapeutic businesses.“