Acquisitions are finalized just days before start of RSNA conference
It went down to the wire, but Picker International and GE Medical Systems achieved their goals of acquiring Elscint's CT, nuclear medicine, and MRI business units in time for this month's Radiological Society of North America meeting. Picker completed its deal to buy Elscint's CT unit on Nov. 27, while GE picked up the Israeli company's nuclear medicine and MRI units on Nov. 25.
Picker ended up paying $265.9 million to Elscint's parent, Elbit Medical Imaging of Haifa, Israel, while GE paid $100 million for the two businesses it bought. Elbit is believed to have sought the divestitures as the result of recent profitability problems at Elscint, which had a 29-year history in the medical imaging market as an independent company.
GE and Picker essentially divided Elscint employees by modality, according to Peter Annand, general manager and COO of Elscint's U.S. subsidiary in Rockleigh, NJ. Essentially all of Elscint's sales, service, and applications specialists received job offers, as well as product managers and even vice presidents. The jobs of about two dozen administrative personnel in the Rockleigh office are in question, because that location will probably be closed.
Both GE and Picker have indicated that they will maintain Elscint's manufacturing operations in Haifa. Picker, for example, plans to take over the same buildings formerly occupied by Elscint's operations, according to Gary Kaufmann, director of marketing and sales for Picker's CT division. Elscint will remain in truncated form as a manufacturing business that will provide components to both Picker and ELGEMS, the Israeli joint-venture company that supplies GE with nuclear medicine systems.
The deal has already wrought major changes on the medical imaging industry. The most dramatic of these changes are in CT, which was Elscint's strongest modality. Gaining access to Elscint's product line and engineering and service talent will give Picker a major boost in its quest to build its share of the $1.6 billion global CT market from 15%, where it is today, to 25% in 2003. The acquisition also gives Picker access to a multislice CT scanner, Mx8000, that is ready for prime time. Finally, it gives the vendor a leg up in developing the next generation of multislice technology, using large-area detectors and cone-shaped x-ray beams.
Picker has hired essentially all Elscint's 650 CT employees and has established a new subsidiary, Picker Israel Ltd., that will occupy Elscint's former headquarters in Haifa. Picker is in the process of dividing up R&D duties between its Cleveland headquarters and Picker Israel.
Picker deliberately chose to retain Elscint's CT talent; gaining access to the company's engineering, sales, and service personnel was the primary goal of the acquisition, according to Kaufmann.
