Imaging giant GE Medical Systems has signed a definitive agreement to acquire Imatron, a pioneer in cardiac electron-beam tomography (EBT). The deal, announced Sept. 24, will provide Imatron shareholders about $200 million in GE stock. The stock swap
Imaging giant GE Medical Systems has signed a definitive agreement to acquire Imatron, a pioneer in cardiac electron-beam tomography (EBT). The deal, announced Sept. 24, will provide Imatron shareholders about $200 million in GE stock. The stock swap could happen within two months, according to the companies.
The announced deal marked a busy September for GE, which three weeks earlier signed an agreement to buy Coincidence Technologies, a key provider of PET technology. Imatron, whose worldwide installed base is about 170 systems, and Coincidence give GE two needed components in its effort to provide a complete array of imaging services.
“The timing of the two deals is somewhat coincidental,” said Patrick Jarvis, a spokesperson for GE.
Under the latest agreement, Imatron shareholders will receive $1.89 per share payable in GE stock. The actual number of GE shares will depend on the trading prices of GE stock over a period of time prior to the closing date of the transaction. Imatron stock closed at $1.77 on the Nasdaq exchange the day the acquisition was announced, while GE stock closed at $35.87 on the New York Stock Exchange-up about five points from the previous day.
The deal appears to benefit both firms. GE picks up a company with a proven track record, coveted cardiac imaging technology, and effective sales and distribution channels. Imatron joins a global sales and service network increasingly dedicated to expanding its presence in cardiology.
Imatron executives have been shopping the company for much of the past two years. Discussions involved GE and other major OEMs.
“Our goal has been to make EBT the preeminent medical imaging device in the world,” said Jeff Sorenson, Imatron director of marketing. “In order to do that, we needed to combine our product with those of a company like GE, whose detector technology and front-end user interfaces and marketing are outstanding. It really is a perfect fit.”
The $1.89 per share compares favorably with company stock values during peak times, according to Sorenson. Additionally, companies are traditionally valued at up to twice their bottom line, he said. In this instance, the deal is worth more than twice the $90 million in sales that Imatron reported last year.
“One of the early fruits for us will be all of GE’s salespeople becoming aware of the benefits of electron-beam tomography technology,” Sorenson said. “Sales should increase dramatically and could outstrip our ability to manufacture.”
GE will also evaluate whether and how the different technologies from the two companies and their applications might complement each other. Of particular interest is GE’s LightSpeed multislice CT system and Imatron’s EBT C300.
“We know there’s a lot of potential for these products to work together and independently,” Jarvis said. “All of GE’s products will continue-and that holds true for the EBT system.”