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Access Radiology prepares to buy EMED in deal to unite teleradiology companies


Purchase would create teleradiology powerhouseConsolidation in the PACS and teleradiology market appears to be continuing. Teleradiology and miniPACS provider Access Radiology has submitted an offer to acquire teleradiology and PACS firm EMED from

Purchase would create teleradiology powerhouse

Consolidation in the PACS and teleradiology market appears to be continuing. Teleradiology and miniPACS provider Access Radiology has submitted an offer to acquire teleradiology and PACS firm EMED from its parent Raytheon. Knowledgeable sources say that the deal is expected to close before this month's Radiological Society of North America meeting.

Both companies declined to comment, but a press conference by Access has been scheduled at the show to announce the acquisition of a major teleradiology supplier. If it goes through, the deal would create a dominant presence in the diagnostic teleradiology marketplace.

Access is interested in EMED because of the San Antonio firm's extensive installed base of at-home teleradiology users. Access would be able to market its wide-area networking teleradiology products to these customers, sources say.

In addition, Access will gain EMED's distribution channels. Access currently sells its products through a direct sales force and through OEM partners such as GE Medical Systems, Sterling Diagnostic Imaging, and HBO & Company. EMED, on the other hand, markets its offerings in the U.S. through a small direct sales force and a distributor network. The company also has an international distributor presence, which Access does not. That was a factor in the Lexington, MA-based firm's interest, sources say.

Access would also broaden its technology with the acquisition, moving from being a teleradiology and miniPACS provider to more of a high-end PACS player. EMED's PACS technology, however, did not appear to be a strong factor in piquing the company's interest. Access will probably continue its focus on the diagnostic teleradiology market, while also growing its capabilities in the miniPACS realm, sources say.

Access would also receive EMED's MegaScan monitor product line, marketed through other PACS firms on an OEM basis, and would maintain EMED's operations in San Antonio.

For EMED, the deal would mark the end of its independent identity as a company that has played a strong role in the teleradiology market. EMED was formed in 1994 by defense firm E-Systems to include the consolidated operations of teleradiology market leaders Image Data and Advanced Video Products, which E-Systems bought in 1994 and 1992, respectively. E-Systems was in turn purchased by Raytheon in April 1995. Following the Raytheon deal, speculation arose regarding EMED's status at Raytheon. Some market watchers believed Raytheon would rather spin off the company than maintain a small healthcare business outside its core defense operations.

In the past year, EMED has sought to make use of its hefty teleradiology installed base for PACS sales. The company has had limited success, however, landing only a small number of these contracts.

The deal would appear to be a winner for both sides. Access would be positioned as the industry leader in the two major teleradiology markets: remote primary diagnosis and at-home teleradiology, said Michael Cannavo, president of Image Management Consultants of Winter Springs, FL.

"It should also make Access more desirable as a potential acquisition by one of the major companies, if Access chooses to go that route," he said.

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