Executives envision opportunitiesin cardiology from E for M buyout

February 14, 1996

Push into image networking continuesThe recent acquisition of E for M by Marquette Electronics ofMilwaukee demonstrates how medical device companies are, in increasingnumbers, joining forces to pair one firm's domestic product lineand

Push into image networking continues

The recent acquisition of E for M by Marquette Electronics ofMilwaukee demonstrates how medical device companies are, in increasingnumbers, joining forces to pair one firm's domestic product lineand distribution strengths with another firm's brand name anddistribution advantages in overseas markets.

Strategic alliances between Acuson and Shimadzu, ATL and Hitachi,and merger/acquisitions involving Dornier and Acoustic Imaging,Schering and Medrad, and Sopha and Summit, were all designed towardthis end.

In this instance, Marquette CEO Michael Cudahy saw synergiesbetween Marquette's cardiology, patient monitoring and gas analysisproduct lines and the electrocardiography (ECG) and stress testsystems made by Hellige GmbH. Hellige is a Germany-based subsidiaryof E for M, which is headquartered in Torrance, CA.

The acquisition brings Hellige, a respected company with morethan 100 years of experience in the ECG field, into Marquette'scamp while greatly expanding Marquette's presence in Europe, accordingto Cudahy. The combined companies have worldwide sales exceeding$500 million and employ about 3000 people.

E for M will contribute about $200 million in annual sales,according to Michael Breedlove, vice president of field operations.European sales account for about two-thirds of that total.

The $89 million acquisition was completed in January when remainingE for M common stock was purchased at the initial offering priceof $12 per share, Breedlove said. The deal was announced lastNovember after board approval by the two publicly traded companies.

E for M CEO Peter Tong has been appointed co-president of Marquette.He will be responsible for the company's international business,as well as for a supplies division that sells ECG paper, disposableelectrodes and the Vari-X line of cine film designed for cardiaccatheterization labs, Breedlove said.

The E for M corporate identity will survive for business directedat cardiac cath labs, according to Breedlove. Businessformerlyhandled by Marquette's diagnostics group was carved off and combinedwith E for M cardiac cath and physiological monitoring marketingoperations. E for M's Torrance group also continues to managea separate 35-person sales force devoted to disposable productsales, he said.

"We now have a broad product line from one company toprovide all the needs of cardiac cath labs," he said.

Breedlove predicts few changes in E for M's effort to expandits reach into medical imaging. Its imaging systems division suppliesOEM customers with digital photospot products, display monitors,DICOM bridges, scan converters and other components. E for M,which for years sold its products through OEMs, flew its corporatecolors for the first time at the 1995 Radiological Society ofNorth America meeting.

Breedlove expects that the acquisition will lead to accelerateddevelopment of new products designed for image acquisition, reviewand long-term archiving.

"We have a major commitment to diagnostic imaging andto the continued growth of our product line," he said.