Picker forms finance arm to woo hospital accounts

June 9, 1993

Picker International has consolidated its equipment financingservices by shedding its relationship with a third-party firmand forming a new joint-venture finance company. The new company, Picker Financial Group, expects to focus onleasing and

Picker International has consolidated its equipment financingservices by shedding its relationship with a third-party firmand forming a new joint-venture finance company.

The new company, Picker Financial Group, expects to focus onleasing and to give Picker customers more flexibility with equipmentupgrades, according to Ira S. Miller, PFG vice president of marketingand sales. Miller was with GE for 19 years, including five withGE Medical Systems.

Picker's partner in the venture is Leasing Dynamics (LDI) ofCleveland, a high-technology asset management company with a strongleasing operation. Picker and LDI are equal partners in the newcompany, which is also based in Cleveland.

Picker's relationship with U.S. Concord, who provided financingfor Picker equipment on a third-party basis, was satisfactory,Miller said. But Concord specializes in start-ups and clinics,and the imaging equipment vendor wanted to improve its accessto the hospital financing market.

"We wanted to provide financing in a market where we weren'tfinancing before," Miller told SCAN.

In addition, PFG will finance only Picker equipment. U.S. Concordfinanced equipment manufactured by Toshiba as well as by Picker(SCAN 8/14/91).

The new company will offer more options to Picker customers,especially in upgrading leased equipment. LDI's experience inthe computer asset management field has made it sensitive to medicalimaging customers' requirements for upgrades, Miller said.

Picker has also included a number of benefits in the leasingpackages available with PFG. Picker will waive progress payments,which often must be made in the interval between the orderingof equipment and its delivery, he said.

With the exception of MRI, Picker will assume dismantling andshipping charges typically assessed at the end of a lease. AndPicker will guarantee equipment uptime.

Controlling its own leasing program gives Picker an equal footingwith GE and Siemens, both of which have integrated financing divisions(SCAN 4/24/91). Leasing is becoming increasingly popular withhospitals looking for alternative financing as equipment costsrise and budgets shrink.

"Our goal is to make it easier to select Picker equipment,"Miller said. "Once the equipment decision is made, we wantto make the financing as painless as possible."

BRIEFLY NOTED:

  • Boston Scientific completed an initial public offeringof 26.5 million shares last week. The Watertown, MA, catheterfirm raised over $427 million with the offering.

Stock in the company traded at prices substantially lower thanthe company had expected. The prospectus for the IPO estimateda price per share of $19 to $22. After the first week of publictrading, Boston Scientific stock hovered at just over $17 a share.

The company used proceeds of the offering to buy out stock heldby Abbott Laboratories. Abbott was paid $303.6 million for 18.8million shares.

Boston Scientific provides catheters for interventional proceduresand collaborates with ultrasound vendor Diasonics in the developmentof intraluminal ultrasound technology (SCAN 2/12/92 and 4/25/90).

  • Diasonics reported last week that it lost a court battlewith a former x-ray distributor. An unfavorable judgment of $3.1million was brought against Diasonics. The litigation was a holdoverfrom the reorganization of Diasonics' specialty x-ray subsidiary,OEC Diasonics, in 1984. It does not relate to current business,the vendor said.

The judgment will result in a one-time charge of about 25 per share, which will be taken in the medical imaging vendor'ssecond quarter. Diasonics plans to appeal the ruling.

  • Vision Ten of Torrance, CA, has not reached profitabilityin the picture archiving and communications systems market. Thesmall PACS firm saw its operating losses increase 10.5% in itsfirst quarter (end-March), from $389,745 in fiscal 1991 to $430,061this year. However, revenues did jump 134%, from $130,560 in thefirst quarter of 1991 to $304,896 in the same period this year(see graph). Vision Ten sells a film digitizing and distributionsystem called RITA (radiographic imaging, transmission and archive)(SCAN 2/14/90).

The company brought on high-powered help at the top last monthby appointing Robert L. Doretti as president and CEO. Founderand former president Richard K. Gerlach remains chairman of thecompany. Doretti is a veteran computer executive, having servedas senior vice president for Wang Laboratories and executive vicepresident at Dataproducts. Doretti helped develop and implementthe sales and marketing strategies of those two firms over thepast two decades.

  • Serviscope, a start-up independent service organizationbased in Wallingford, CT, concluded a second round of venturecapital financing to help fund expansion of the business, accordingto Donald J. Southard, president and CEO. Southard left his positionas vice president of sales, marketing and service for ToshibaAmerica Medical Systems late last year to head up the new ISO(SCAN 12/25/91).

St. Paul Venture Capital, Philadelphia Venture and Nazem &Co. were major participants in raising the new equity funds.

  • AFP Imaging has successfully restructured the terms ofits subordinated debentures and is in compliance with all bankloans, the company announced last week. The Elmsford, NY, supplierof medical film processors and other graphics and medical imagingequipment had gone into default when it failed to make paymenton its subordinated debt a year ago (SCAN 6/5/91).

AFP reported its first pre-tax profit in six quarters duringits third quarter of 1992 (end-March). The firm had a net profitof $162,895, compared to a loss of $172,042 in the same periodof 1991. Revenues increased 7.6% for the quarter, from $9.4 millionin 1991 to $10.2 million this year.

Three major European medical imaging vendors, General MedicalMerate and Villa of Italy and Philips of the Netherlands, signedx-ray distribution agreements with AFP late last year. AFP isthe exclusive U.S. distributor for all GMM imaging products (SCAN12/25/91).

The American firm has created its own AFP line of x-ray equipment,which it will sell as systems in combination with its film processors.AFP anticipates this new x-ray business will bring in severalmillion dollars of additional revenue in fiscal 1993.