News | February 27, 2015

Merge Acquires DR Systems

The acquisition will deliver solutions that enable healthcare partners to elevate their clinical success, financial results and the health of their communities

Merge Acquires DR Systems

Merge Healthcare announced it recently acquired DR Systems Inc. for about $70 million. DR Systems is a privately held San Diego-based company in medical imaging information systems.

According to the KLAS Research ratings released on Jan. 29, 2015, the go forward business will rank No. 1 in cardiovascular information systems (CVIS), No. 1 in hemodynamics monitoring and No. 1 in radiology information systems (RIS).

“I’m thrilled to add the talents, technologies, and intellectual property that have made the DR Systems brand synonymous with customer satisfaction,” said Justin Dearborn, chief executive officer of Merge Healthcare. “Merge and DR Systems share a common heritage of creating and maintaining long-term partnerships with our healthcare customers. This acquisition reflects Merge’s commitment to delivering solutions that enable our healthcare partners to elevate their clinical success, financial results, and the health of their communities. This acquisition also greatly expands our market share, which we believe is extremely important given the provider consolidation that is underway. Further, the acquisition will allow us to deploy our iConnect Network services, including pre-authorization services, to a broader client footprint immediately,” stated Dearborn.

Murray Reicher, M.D., FACR, founder, chairman, and chief executive officer of DR Systems, will assume the role of chief medical officer of Merge Healthcare. Reicher is a board-certified diagnostic radiologist and fellow of the American College of Radiology, and is recognized for his numerous scientific publications, inventions, and presentations in the fields of neuroradiology, musculoskeletal MRI, and health information technologies.

“We are joining Merge based on our joint vision of providing a rapidly advancing, unified system for all medical imaging arenas, including radiology, cardiology, and pathology,” Reicher said. “Together, we will enable our customers to connect to consumers and healthcare providers in ways that promote service, patient compliance, and improved population health.”

“We’re committed to supporting DR Systems’ clients, and we want them to have confidence that we have the vision, scale, and resources to help them achieve their plans for their organizations’ futures. We are also excited to have Dr. Reicher join Merge and know that he will be a remarkable asset to the company,” Dearborn said.

Following the acquisition, support for DR Systems’ core platform will remain in place. Current implementations will continue, and Merge plans to support and advance all product lines going forward. Merge will work with all clients to support their short-term and long-term business needs.

The transaction is expected to be accretive to Merge’s non-GAAP adjusted EPS in 2015 and future years. Non-GAAP adjusted net income and EPS are defined later in this press release and exclude share-based compensation expense, transaction costs, acquisition-related amortization and deferred revenue and related cost of sale adjustments.

Merge Healthcare financed the acquisition through a combination of approximately $20 million of cash on hand and $50 million of cash raised from the sale of shares of newly issued convertible preferred stock, at a $4.14 per share common equivalent calculated based on Merge's 30-day volume weighted average common stock price, to a group of investors arranged by Guggenheim Corporate Funding, LLC (“Guggenheim”), the agent under Merge's existing credit facility. "We believe this investment is a testament to Guggenheim's confidence in the future of Merge Healthcare and the opportunities that will arise from the acquisition of DR Systems," noted Dearborn.

For more information: www.merge.com

Related Content

Partners HealthCare Chooses Visage 7 for Enterprise Imaging
News | Enterprise Imaging | January 18, 2019
Visage Imaging Inc. announced the signing of Partners HealthCare, the largest health system in Massachusetts, for...
Seamless Interoperability – Fact or Fiction? This webinar will show how Nemours Children’s Health System adoption of ScImage’s PICOM365 Enterprise PACS  improved workflow. The product will be highlighted at HIMSS 2019.
Sponsored Content | Webinar | PACS | January 17, 2019
This ScImage-sponsored ITN/DAIC webinar will be held at 2 p.m. Eastern time, Wednesday, Feb. 6, 2019.
NewYork-Presbyterian Hospital Partners With Philips for Health IT and Clinical Informatics
News | Enterprise Imaging | January 16, 2019
Philips announced that NewYork-Presbyterian Hospital has chosen to implement the company’s IntelliSpace Enterprise...
Artificial intelligence, also called deep learning and machine learning, was the hottest topic at the 2018 Radiological Society of North America (RSNA)) meeting.

Artificial intelligence was the hottest topic at the 2018 Radiological Society of North America (RSNA)) meeting, which included a large area with its own presentation therater set asside for AI vendors.

Feature | Artificial Intelligence | January 10, 2019 | Dave Fornell, Editor
Hands down, the hottest topic in radiology the past two years has been the implementation of...
Pacific Northwest VA Network Selects Carestream as Enterprise PACS Supplier
News | PACS | January 08, 2019
Carestream has been awarded a multimillion-dollar healthcare information technology (IT) contract for Veterans Affairs...
GE Submits Initial Public Offering Paperwork for Healthcare Division
News | Radiology Business | December 19, 2018
December 19, 2018 — As part of its plans to spin off its healthcare division into a separate company, GE reportedly s
Infinitt Showcases New RIS/PACS Features at RSNA 2018
News | PACS | December 19, 2018
Infinitt North America highlighted a range of healthcare information technology (IT) products and applications at the...
Affordable Care Act Ruled Unconstitutional in Texas Federal Court
News | Radiology Business | December 17, 2018
A judge of the Federal District Court for the Northern District of Texas ruled the Affordable Care Act (ACA)...
Videos | Enterprise Imaging | December 14, 2018
ITN Editor Dave Fornell and ITN Contributing Editor Greg Freiherr share their insights on the new technology and vend
RADxx Announces 2nd Annual Award Winners for Outstanding Leadership in Medical Imaging Informatics
News | Radiology Business | December 14, 2018
RAD Women (#RADxx), a networking group for the advancement of women in imaging informatics, recently announced the...