Company must build customer confidence to succeedSopha Medical and Summit Nuclear made it official at last week'sSociety of Nuclear Medicine meeting in Minneapolis. The mergedcompany debuted as SMV, with U.S. operations headquartered atSummit's
Sopha Medical and Summit Nuclear made it official at last week'sSociety of Nuclear Medicine meeting in Minneapolis. The mergedcompany debuted as SMV, with U.S. operations headquartered atSummit's facility in Twinsburg, OH.
The new company will be known as SMV America in the WesternHemisphere and SMV International in the rest of the world. SMVInternational will be based at Sopha's headquarters in Buc, France.Manufacturing and R&D will continue at both locations.
At the SNM meeting, SMV officials emphasized the fit of thetwo organizations, as well as their respective histories of innovations.SMV will have a product lineup of three dual-head systems andthree single-head systems, with the appellation "Vision"added to each camera's product name.
The seeds of the merger were planted in the 1980s, when Summitsold Sopha-manufactured cameras in the U.S. until the French companybuilt its own direct sales force. Despite the fact that they werecompetitors, the two firms maintained contact through the years,according to Colin McNaught, chairman and CEO of SMV America.
"We had always had some ideas that at some point it wouldbe to both companies' advantage to form a joint venture,"McNaught said. "The fact is that Sopha was interested ina U.S. manufacturing operation and Summit was interested in globaldistribution."
McNaught is joined in SMV America's executive suite by presidentRandy Sommerdyke. Andre Debionne is chairman and CEO of SMV'sholding company, while Jean Plazenet is chairman and CEO of SMVInternational.
Sopha and Summit's products represent a good technologicalfit, according to William Bishop, vice president of business developmentand planning. Sopha brings to the table two variable-angle dual-headgamma cameras, while Summit is known for its digital-detectortechnology.
"If you put the two companies together, you come up witha very robust set of products," Bishop said. "Sophawas strong in cardiology, Summit in oncology."
SMV will support the older Hitachi-manufactured cameras soldby Summit, but will not emphasize those products because unfavorableexchange rates between the Japanese yen and the U.S. dollar havereduced profit margins on Japanese-manufactured products.
SMV's long-term workstation platform will be the PowerStationdeveloped by Summit. SMV will support Sopha's XT computers, andwill port Sopha software to the PowerStation. At its SNM booth,SMV showed XT and PowerStation computers linked together and exchangingdata.
The U.S. operations of Summit and Sopha will be consolidatedat Twinsburg, and Sopha will experience job cuts in administrationand support at its Maryland and Buc facilities. The companiesdid not make cuts in R&D or manufacturing.
SMV may be a stronger entity than either Summit or Sopha wasalone, but the new company faces a tough fight. SMV must buildcustomer confidence in a market where buyers are increasinglyreticent to purchase capital equipment from anyone but the uppertier of market leaders. The growing influence of preferred-vendorprograms, which are heavily weighted toward multimodality vendors,also presents problems. In addition, there are serious questionsabout the number of gamma camera vendors that the nuclear medicinemarket can support in the long term.
SMV officials believe the strength of their technology andthe added muscle of their combined sales, service and R&Doperations will make them one of the companies left standing whenthe dust settles. The company has global revenues close to $100million and $50 million in committed capital.
"We've made a large financial commitment to nuclear medicine,"Bishop said.