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 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

ScImage and Invia Partnership Announced
News | Cardiac PACS| September 19, 2017
ScImage Inc. and Invia Imaging Solutions recently announced formation of a joint partnership at the American Society of...
Vascular screening for abdominal aortic aneurysm, peripheral artery disease and hypertension during the VIVA Study in Denmark

Vascular screening for abdominal aortic aneurysm, peripheral artery disease and hypertension during the VIVA Study. Photo credit: Lisbeth Hasager Justesen, Viborg Hospital.

News | Cardiac Diagnostics| September 12, 2017
September 12, 2017 — A new screening program for vascular disease saves one life for every 169 men assessed, accordin
Cardiovascular Research Foundation (CRF) announced the promotion of Juan F. Granada, M.D., as the foundation’s president and chief executive officer (CEO). CRF sponsors TCT.

The Cardiovascular Research Foundation (CRF) announced the promotion of Juan F. Granada, M.D., as the foundation’s president and chief executive officer (CEO).

Feature | Cath Lab| September 12, 2017
September 12, 2017 – The Cardiovascular Research Foundation (CRF) a
Abbott. St. Jude Medical has updated its firmware to address cybersecurity issues with its Allure Quadra MP and other EP devices

Abbott. St. Jude Medical has updated its firmware to address cybersecurity issues with its Allure Quadra MP and other EP devices.

Feature | EP Lab| August 29, 2017 | Dave Fornell
August 29, 2017 — The U.S.
News | August 28, 2017
To ensure you continue to receive information most critical to your job, please participate in a survey that will tak
Healthcare cybersecurity concerns have increased dramatically as EMRs and medical devices become more digitally connected.

Healthcare cybersecurity concerns have increased dramatically as EMRs and medical devices become more digitally connected.

Feature | Cybersecurity| August 18, 2017 | Dave Fornell
August 17, 2017 — Cybersecurity has become a growing concern in healthcare as patient data, medical systems and impla
ScImage Awarded U.S. Government DIN-PACS IV Contract
News | PACS| August 16, 2017
ScImage Inc. was recently awarded a new DIN-PACS IV (Digital Imaging Network/Picture Archiving and Communications...
CMS considers eliminating cardiac bundled payments.
Feature | Business| August 16, 2017 | Dave Fornell
August 16, 2017 — The Centers for Medicare and Medicaid Services (CMS) announced a proposed rule to reduce the number
CMS is considering eliminating or changing bundled payments for cardiac rehabilitation.

CMS considers eliminating or changing bundled payments for cardiac rehabilitation.

News | Business| August 14, 2017 | Dave Fornell
...
Overlay Init