PACS market consolidation continues as Medasys joins forces with Citation

Companies seek to offer integrated IT solutions

Mergers and acquisitions have played a visible role in the turbulent history of the PACS market to date. Last month French PACS firm Medasys Digital Systems and healthcare information systems company Citation Computer Systems of Chesterfield, MO, announced a partnership.

Under the terms of the deal, the two companies will participate in a reverse merger in which Medasys will become a subsidiary of Citation. Following the transaction, which is expected to close early this month, the Citation name will be dropped in favor of Medasys. No other terms of the deal were released.

The merger will create a $50 million company that will be publicly traded on both the Paris Bourse, where Medasys is listed, and the NASDAQ Stock Exchange, where Citation is traded. Shareholder and regulatory approvals will be required.

A key factor in the deal was the desire for Medasys to provide integrated PACS and HIS products, such as an electronic patient record system, said Jean-Marie Lucani, chairman, president, and CEO of Medasys. In addition, the company hopes to alleviate customers' concerns over the French firm's long-term presence in the U.S. market, he said.

Lucani will serve as president and CEO in the new company, while Bob Copper of Citation will be chairman. Current Citation president and CFO Rick Neece will serve as executive vice president and CFO of the new firm. Another key executive, Medasys business development manager Alexis Westermann, will become executive vice president for business development.

Medasys' PACS offering, called Dx Multimodality, is based on the Unix platform and is DICOM-and HL-7 compliant, Lucani said. Dx Multimodality can support both radiology and cardiology environments. In addition to its own workstation software, Medasys believes one of the important benefits of its product is the ability of its PACS server to link up to client workstations from other companies. No image data are altered with Dx Multimodality, Lucani said.

Medasys has experienced its greatest success in PACS in Europe, where it has an installed base of nearly 100 PACS sites, Lucani said. The company has approximately 15 U.S. clients, including Brooke Army Medical Center in San Antonio, TX, and Children's Hospital in Miami. Medasys also markets nuclear medicine gamma cameras and has an installed base of over 200 systems.

In addition to its European efforts, Medasys provides its PACS software on an OEM basis to Hitachi Medical Systems. The company is also active in Brazil through a joint venture with a consulting firm.