Software developer Cedara prepares to buy PACS developer eMed

September 29, 2004

Leveraging its growing strength in the medical imaging market, medical software developer Cedara has signed a definitive agreement to acquire eMed, a privately held provider of PACS and Web-based medical imaging solutions headquartered in Burlington, MA.

Leveraging its growing strength in the medical imaging market, medical software developer Cedara has signed a definitive agreement to acquire eMed, a privately held provider of PACS and Web-based medical imaging solutions headquartered in Burlington, MA.

Under the terms of the agreement, Cedara, based in Ontario, Canada, will pay some US$48 million in cash to acquire eMed, whose sales totaled about US$24 million during the last fiscal year.

"eMed has been a very successful organization on several fronts," said Jacques Cornet, vice president of marketing and customer operations for Cedara. "They've had strong sales this year and have been consistently profitable over the last two years. Based on reputation and installed base, eMed is a key player in the fast-growing PACS end-user market."

The companies are also a good fit for other reasons, according to Dave Mahoney, vice president of sales and marketing for eMed. They are complementary in products and service. Cedara has provided imaging technologies to OEMs for many years, while eMed has provided end-user products and services for nearly two decades.

"The businesses themselves and their core products and services are complementary," Mahoney said. "What makes us attractive to Cedara is that we have a go-to-market in the sales channel that is set up for the end-user market. That's attractive for Cedara to get into. And Cedara has a long legacy of delivering well-engineered products, which will help to complement our existing product line."

Cedara also has a major presence internationally, while eMed does not. eMed hopes to leverage Cedara's strength in that area to increase the combined companies' visibility.

eMed's flagship product, eMed Matrix, is a server, archiving, and workstation solution. Cedara offers a broad range of products as well as expertise and technologies that span all the major digital imaging modalities. Key products include I-ReadMammo for breast imaging diagnostics; Cedara Orthoworks for orthopedic planning; and Cedara CT Works for multislice CT reading.

"This is a very good acquisition from an eMed employee and customer standpoint as well as from a Cedara employee and customer standpoint," Mahoney said. "We are merging two very healthy, long-legacy vendors in the healthcare informatics and imaging marketplace that will be able to complement each other and grow their core businesses in order to continue to be profitable."

Once the deal is completed, eMed, which has more than 90 employees, will be set up as a wholly owned subsidiary of Cedara, which has 260 employees. No material change to the structure of the organization is expected, although product announcements are anticipated as a result of the acquisition, according to Mahoney.

"We have opportunities to integrate many of the advanced clinical applications that Cedara has in its portfolio, specifically things like multislice CT, 3D imaging, and orthopedic templating-clinical applications that you look to add to any radiology-centric PACS workstation," he said. "We'll be incorporating and integrating some of the advanced applications that Cedara has into the existing eMed matrix product line."

Cornet predicted both companies will grow as a result of the deal. eMed may be able to augment its current offering by leveraging eMed's PACS and Cedara's clinical solutions. In return, Cedara stands to gain from having direct feedback from end users that will help the company develop better product capabilities for its OEM customers.

"It is a great combination for growth involving two successful companies that have worked and appreciated each other for several years," he said. "Moreover, it is good news for the radiology community, which can now plan on getting a comprehensive PACS/clinical solution."