10 Jul Merge eFilm to buy Ohio firm in $14M Deal
The acquisition will allow Merge eFilm to offer an integrated PAC (picture achieving and communications) and RIS (radiology information system) solution to its target market of hospitals and imaging centers.
“The acquisition of RIS Logic is an important strategic milestone in our evolution as a healthcare software and services company focused on delivering comprehensive RIS/PACS solutions to our target market,” said Rich Linden, Merge eFilm president and CEO. “Customers have been telling us that they want an integrated image management and distribution solution…and the response from customers and analysts to the purchase has been very positive.”
The purchase of RSI Logic will allow Merge eFilm to have a stronger presence in the imaging center market with the addition of 64 imaging center customers representing over 200 sites. “The RIS Logic CS solution will continue to be central to the business strategy delivered by our combined organization. We will continue to develop new features and client-driven enhancements according to our product road map, as well as continue to enhance the level of support to our existing clients, “said Dan Quigg, president and CEO of RSI Logic.
RIS Logic, founded in 1997 by Dr. Frank E. Seidelmann, a diagnostic neuroradiologist, has been delivering radiology information systems to diagnostic outpatient imaging centers and hospitals in the United States. RIS Logic’s software automates, integrates and replicates optimal workflow of a radiology practice. RIS Logic CS allows its customers to experience improvements in productivity and cash flow by integrating information and automating workflow related to scheduling, report turnaround, billing, claims processing, and other mission-critical operational functions in a practice. Additionally, the practice can uncover ways to reduce bottlenecks, maximize profits and increase revenue through practice analysis tools.
Merge eFilm has wanted to enter the RIS market since 2002. They explored the options of developing RIS software internally, which is a timely and costly process, or partnering with a company that shared a similar vision and strategy. Consequently, the two company’s CEO’s met and began discussions over a year ago at an industry conference, according to Linden. “Merge has been reaching out to like-minded organizations that would share the same vision of the RIS/PAC target market as well as customer service,” he said. “We have been working together with RSI Logic on a short list of customers, and our products are deployed together at a handful of sites. We aligned our customer lists and determined that the overlap is minimal.”
In 2002, Merge also acquired a Canadian software developer eFilm that developed medical imaging and information workflow products and services. eFilm provided Merge with a software-only image viewer that could be downloaded over the Internet. That acquisition allowed Merge to attain its goal of becoming a global leader in diagnostic imaging software tools by achieving a record 20,000 downloads of its eFilm Workstation software in 2002. eFilm Workstation displays diagnostic images, using a standard PC and monitor, and provides exceptional navigation and viewing tools for optimal radiological interpretation. Merge eFilm’s flagship product is Fusion Server PACS, a software package that provides integrated database, image storage and workflow capabilities on one platform.
The acquisition price of all RIS Logic shares is $2.725 million in cash plus 772,000 shares of Merge Technologies common stock, which closed July 10 at $15.13 up from $13.54 the day before the purchase was announced. Therefore, the common stock portion of the acquisition is over $11.8 million based on today’s closing price. Merge stock has been a strong performer lately as the stock price was $6.70 on April 1, 2003.
“We anticipate closing the acquisition of RIS Logic in July and providing an update to our 2003 financial guidance during the second quarter earnings conference call scheduled for July 30 t ,” Linden said.
RSI Logic will be run as a wholly owned division of Merge eFilm. The company will continue to maintain operations in both Wisconsin and Ohio and will have a 15-person direct sales force. The combined company will keep the Merge eFilm name and anticipates preserving the RIS Logic brand name as well.
Mike Klein is the Founder and Editorial Director of the Wisconsin Technology Network and can be reached at firstname.lastname@example.org