Medical Device Link.

Originally Published MX November/December 2005

BUSINESS NEWS

In an estimated $1.2 billion deal, GE Healthcare (Chalfont St. Giles, UK) plans to acquire information technology (IT) provider IDX Systems Corp. (Burlington, VT). GE predicts the merger will "create a leading healthcare IT vendor, offering one of the most comprehensive suites of clinical, imaging, and administrative information systems on the market."

Hogan

"GE and IDX have a shared vision on how to accelerate the adoption of electronic health records across the globe," says Joe Hogan, president and CEO of GE Healthcare. "We are extremely excited about joining with IDX and believe that our combined offerings are in line with where healthcare is headed and match the needs of our customers."

Under the terms of the deal, IDX shareholders will receive $44 per share in cash, for a total consideration of $1.2 billion, net of IDX cash and equivalents. Although the boards of directors of both GE and IDX have approved the merger, the deal is still subject to IDX shareholder and regulatory approvals. It is expected to close by early 2006.

"We think this is an ideal marriage," says IDX CEO Jim Crook. "The product lines of GE and IDX really fit hand in glove and will complement each other in a very big way." Specifically, Crook says that GE currently lacks a core clinical data repository, a hole that IDX's Carecast clinical IT system will fill. He also says IDX's work flow solutions, particularly its image-management systems for radiology, and its revenue-cycle offerings for physicians would integrate well into GE's product lines.

Wanchoo

"IDX's administrative, clinical, and imaging information systems complement GE's clinically focused Centricity information technology offerings," says Vishal Wanchoo, president and CEO of GE Healthcare Information Technologies. "Together, we will be able to offer a comprehensive set of solutions meeting almost every need a hospital, clinic, or doctor's office has."

At the time of the merger announcement, details were not available as to whether or how IDX's current employee base might be integrated into GE. However, Crook emphasized that the deal was good news for shareholders, customers, and employees alike. Whether IDX executives would stay on as part of GE also had yet to be determined, but Crook did note that "there's a very high and keen interest in IDX's executive leadership becoming part of the GE team."

In 2004, IDX reported net income of $31.8 million on revenue of $520.7 million, compared with net income of $58.1 million on revenue of $399.2 million in 2003.

"IDX has grown substantially in recent years, and we believe our opportunities for continued growth and expansion will be best realized through the additional scale and resources that a company like GE can provide," Crook says.

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