Nuclear medicine competitors Sopha Medical and Summit Nuclearserved notice last week that 1994's wild mergers and acquisitionsride didn't end with the Radiological Society of North Americameeting. The two firms closed the year with a bang by
Nuclear medicine competitors Sopha Medical and Summit Nuclearserved notice last week that 1994's wild mergers and acquisitionsride didn't end with the Radiological Society of North Americameeting. The two firms closed the year with a bang by announcingthat they've reached an agreement to merge their firms into asingle nuclear medicine company.
Sopha, of Buc, France, and Summit, of Twinsburg, OH, announcedtheir plan to join forces on Dec. 19. Under the agreement, themajority interest in the new company will be held by a combinationof Sopha parent CEA-Industrie and a group of French investorsled by investment bank Credit Lyonnais. The largest single shareholderin the new company will be Summit World Trade, the parent of SummitNuclear.
Appointed chairman and CEO of the new venture is Andre Debionne,general manager of Innolion, a venture capital arm of Credit Lyonnais.Debionne headed Sopha's U.S. subsidiary, Sopha Medical Systems,in 1988 and `89. SMS president Colin McNaught will serve as chairmanof the new company's North American operations. Randall Sommerdyke,president of Summit Nuclear, will be president of the new firmin North America, reporting to McNaught.
Details on the rest of the new company's corporate structureare sketchy. CEA-I and Summit World Trade have not yet announcedthe name of the new vendor, nor where it will be headquartered.Manufacturing of Sopha products will continue in France, withSummit products produced in the U.S. and France. Integration ofthe firms will begin immediately, although the transaction won'tbe completed until early 1995.
The agreement reprises a relationship between the companies inthe late 1980s, when Summit gave Sopha an entree to the U.S. marketby providing sales and marketing for the company's products (SCAN12/26/90). The relationship was phased out in 1990 as Sopha builta direct sales force.
Both companies are innovators: Sopha was the first vendor tointroduce a variable-angle dual-head camera, while Summit wasthe first to market with a digital camera. Despite their historyof innovation, Sopha and Summit individually have been unablein the past several years to crack the upper tier of nuclear medicinevendors. Merging should put them on a more competitive footingwith firms like ADAC, Siemens, GE and Picker. Sopha/Summit's combinedworldwide market share stands at about 20%, with global salesof $100 million, according to the companies.
One example of future collaboration is digital detectors. Summitdebuted its FX series of second-generation digital cameras thisyear (SCAN 11/23/94), while at the RSNA meeting Sopha unveileddigital technology that is retrofittable to its systems in thefield (see story, page 2). Both technologies will continue tobe offered by the combined company, according to Lonnie Mixon,director of sales support at Sopha. The Sopha/Summit company willalso continue to offer and support all products in each firm'sline.
The Sopha/Summit merger is a fitting denouement to a recurringstory in 1994: the consolidation of single-modality firms intostronger combinations, either through mergers or acquisitions.The moves are predictable, given the long slump in purchasingactivity across all modalities. Forming alliances offers someprotection from the economic vagaries that can batter single-modalityfirms, and many industry experts believe consolidation will continuethrough 1995.