Cedara steps into ultrasound with Dicomit purchase

By Erik L. Ridley, AuntMinnie staff writer

May 30, 2000 --

Medical imaging and PACS software developer Cedara Software moved aggressively yesterday to stake its claim in ultrasound software and connectivity. The Mississauga, Ontario-based company announced its purchase of fellow Canadian firm Dicomit DICOM Information Technologies in a cash and stock deal valued at (U.S.) $15.3 million.

The purchase price also includes a previous investment by Cedara in Dicomit, of Markham, Ontario. Cedara had held an 8.5% stake in Dicomit through a 1998 loan that was converted into an equity position.

Dicomit is known primarily for its DICOM Image Manager and DICOM Information Manager ultrasound connectivity products, which upgrade legacy ultrasound scanners to DICOM compatibility. The company has recently added support for other modalities as well, introducing Web-based image distribution technology and other software components. Dicomit also offers a 3-D ultrasound software package (3D ROI Upgrade), and a product called Micropaacs, a miniPACS targeted at small hospitals and clinics.

For Cedara, the acquisition represents a calculated first step into ultrasound, complementing the firm's positions in MR, CT, and nuclear medicine software, according to Arun Menawat, vice president and general manager of core software and service.

"This allows us to really position ourselves as a full-service provider to all medical imaging modalities," he said.

Dicomit's activities in Web-based connectivity and live remote image viewing were also of interest to Cedara. In archiving, Dicomit's Micropaacs will complement Cedara's VR HardStore archive product, which is designed primarily for larger hospitals and facilities with greater image storage requirements, he said. While Micropaacs has been deployed mainly in ultrasound environments thus far, it could be applied to other modalities as well, he said.

Both vendors distribute their technologies exclusively through OEM channels, adding to the synergies between the firms, Menawat said, and the companies have many customers in common. Moreover, the deal gives Cedara access to a fast-growing company. Dicomit's sales have tripled in the past twelve months, Menawat said.

Dicomit will be run as an independent subsidiary, although Dicomit technology will be included in Cedara sales proposals on a case-by-case basis, Menawat said.

"When we have a customer who's looking for a multimodality solution, we will present one set of proposals, and be able to give them Dicomit products and Cedara products to create one solution," he said. "But we will operate as two independent units."

Cedara is also in the process of evaluating the multimodality capabilities of Dicomit's Image Manager software. The firm may decide to incorporate its MR and CT viewing components into Image Manager for use in multimodality applications, although that has not yet been decided, he said.

"A long-term proposition could be to provide, for example, a custom solution for ultrasound and another [cardiac imaging] modality to give cardiologists images that they can't get today," he said.

By Erik L. Ridley
AuntMinnie.com staff writer
May 30, 2000

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