International Business Machines Corp. (IBM) announced last Thursday that it will buy Merge Healthcare Inc., a company that gives medical images and clinical systems. The deal will cost 1 billion US Dollars (USD).
IBM's purpose is to combine the healthcare company with its Watson Health analytics unit.
With this move, shareholders of Merge Healthcare will get 7.13 USD per share, and will have a premium of 31.8 percent upto Wednesday's close. These numbers are according to IBM and Merge.
The shares of Merge Healthcare went up to 29.5 percent at $7 in early trading, while IBM's shares slightly changed at USD 156.78.
According to the calculation of Reuters, based on the 100 million outstanding Merge Healthcare shares as of June 30, the equity portion of IBM's offer is 713.1 million.
Merge Healthcare Inc. was founded in 1987 and has, since then, built a reputation in the medical field for its ability to transform legacy or film-based images into modern or filmless digitized images which they distribute and interpret diagnostically. It has acquired and combined with several firms that enabled them to come up with clinical systems. Among the companies are: RIS company, which designed software for management of business and clinical workflow for imaging centers to streamline operations and accelerate productivity; AccuImage Diagnostics Corp., which was into radiology academic research and created products which made use of advanced visualization technologies, clinical specialty, and medical imaging; and, Cedara Software Corp., which created medical imaging software for OEM and VAR customers worldwide.
The cloud-based Watson computing system is into the analysis of high volumes of data, the understanding of complex questions, and the proposal of evidence-based answers.
While IBM has been known for many years as a multinational technology and consulting firm, it has lately ventured into the field of health and medicine. This particular deal shall be IBM's third health-related buy since it launched Watson Health last April.