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Gendex x-ray growth continues; Philips dental, Transworld on deck

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Gendex, the leading supplier of dental x-ray systems in the U.S.,is close to completing two acquisitions that will boost its positionin medical x-ray, provide an entroeee into mammography, and expandthe firm's dental business worldwide. The Des

Gendex, the leading supplier of dental x-ray systems in the U.S.,is close to completing two acquisitions that will boost its positionin medical x-ray, provide an entroeee into mammography, and expandthe firm's dental business worldwide.

The Des Plaines, IL, imaging vendor is in final due diligencebefore completing the acquisition of x-ray and mammography supplierTransworld X-ray of Charlotte, NC. Gendex also hopes to closean agreement early next year to acquire the dental x-ray businessof Philips, according to John J. McDonough, Gendex president.

"One (the Philips dental acquisition) is strategic becauseof the market. The other (Transworld) is strategic because ofthe product, which is mammography," McDonough told SCAN.

Gendex is already a medical x-ray supplier through its acquisitionthree years ago of Universal/Allied Imaging (SCAN 3/1/89) andits own product development. If Gendex completes its acquisitionof Philips' dental business, it would be the second time thefirm has taken over the dental x-ray line of a major medical imagingvendor. Gendex was formed in 1983 with the acquisition of GE'sdental x-ray division

Gendex acquired the handpiece and cutting equipment businessof Kestral Dental a year ago (SCAN 9/12/90). Dental capital equipmentnow makes up 80% of the firm's business. Acquisition of Transworldwould help Gendex boost the relative strength of its medical imagingbusiness, McDonough said.

Transworld, a 20-year-old radiographic supplier, entered mammographyin a big way in 1988. The firm has shipped about 700 mammographysystems since then, president James Lee told SCAN in an interviewprior to the Gendex announcement. Transworld now ranks with GE,Lorad and Bennett as top U.S. mammography suppliers, Lee said.

Transworld had been searching for an investor to help fundexpansion of its product line in both mammography and high-frequencyx-ray.

"We are looking for an equity investor," Lee said."We maintain a large and expensive R&D effort and wantto expand that."

Transworld has exclusive rights to manufacture, distributeand license a mammography technique called slit scanning thatwas developed by Dr. Gary Barnes, a physicist at the Universityof Alabama. Slit scan mammography can eliminate scatter in theimage, reducing the dose and improving images of dense glandularbreast tissue, Lee said.

The firm had been planning to initiate clinical testing ofthe technology in 1992, he said.

Gendex sells its Universal and Gendex medical x-ray lines throughdealers, as does Transworld. Just as the Kestral acquisition gaveGendex new products to handle through its dental dealers, themerger of the two x-ray product lines in a single dealer networkshould help boost overall medical sales.

"The logic is obvious," McDonough said.

As government standards for mammography screening are tightened,mammography suppliers should do a brisk business replacing antiquated,low-tech machines, Lee said.

"I think the replacement market is very good. It is agrowing market. There is intense interest right now in replacingold mam units," he said.

The flip side of high-tech mammography, however, is that theequipment will be expensive and more likely to remain in the handsof radiologists rather than spreading to family practice, internalmedicine and ob/gyn markets, Lee said.

"That (the movement to private office use) may be happening,but I think it has been blunted by the emphasis on high-qualitymammography," he said. "The feeling now is that youhad better do it right or not do it at all. It (mammography) hasto be under the control of radiologists."

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