Vendors mum on rumor that GEmay buy Lockheed Martin unit

Acquisition would be third sale of PACS unit

Executives from GE Medical Systems and Lockheed Martin WesternDevelopment Laboratories Medical Imaging Systems aren't talkingabout a rumor that surfaced last week hinting that GE is planningto buy the Lockheed Martin unit. If a sale were to go through,it would be the third time in two years that corporate controlof Lockheed Martin's Hoffman Estates, IL, PACS unit has changed.

The Lockheed Martin business was originally Siemens Gammasonics,one of two PACS units operated by the German vendor. Siemens Gammasonicscollaborated with Loral Western Development Laboratories on theMedical Diagnostic Imaging Support (MDIS) military PACS project.

Loral bought out the Siemens interest in 1994. The unit's namewas changed to its present incarnation after defense and aerospacefirm Lockheed Martin acquired Loral earlier this year (SCAN 1/17/96).The business has been most successful in selling filmless-hospitalinstallations to hospitals run by the military and the Departmentof Veterans Affairs. It landed all three filmless-hospital contractsissued by the VA last year.

Milwaukee-based GE ramped up its effort in PACS by forming itsNetwork Products and Services unit in 1994 (SCAN 12/14/94). Theunit has made progress in developing a mid- to high-end DICOM-compliantPACS line, but has not made any major filmless-hospital saleson the level of the MDIS project. Acquiring the Lockheed Martinbusiness would give GE access to the service revenue stream theunit derives from MDIS, as well as Lockheed Martin's other militaryand VA sites.

A possible tie between GE and Lockheed Martin was establishedthis summer when GE hired the Lockheed Martin unit's former chiefexecutive, Anthony Lombardo, to head the Network Products andServices group (SCAN 6/5/96).

Although a GE/Lockheed Martin combination would prove intriguing,PACS industry observers will have to wait to see whether the rumorproves true. A Lockheed Martin spokesperson declined to commenton the rumor, while GE officials were unavailable for commentas of press time.