GE HealthCare plans to pay $2.3 billion in cash to acquire imaging software developer Intelerad, toward the goal of building a cloud-first diagnostic ecosystem that can tap into ambulatory, teleradiology and hospital settings.
With its focus on radiology and cardiology practices, as well as assisting in clinical trials, Intelerad’s outpatient footprint will serve as a complement to GE HealthCare’s in-hospital imaging business through a broader software-as-a-service model, according to the two companies.
“As hospital and ambulatory care providers face increased demand for imaging and rising patient volumes, they are looking to simplify and unify their workflows,” GE HealthCare President and CEO Peter Arduini said in a statement. “As a result, we expect to accelerate our growth in SaaS products and recurring revenues as we take another evolutionary step to grow into a healthcare solutions provider.”
When it comes to those revenues, GE HealthCare estimates Intelerad will bring in about $270 million during its first year, with about 90% attributed to recurring sales among a customer base of more than 1,500 international healthcare organizations. That includes managing more than 230 million exams per year and over 8 billion medical images.
At the same time, GE HealthCare said it aims to triple its number of cloud-enabled products by 2028, which will also provide opportunities to layer on artificial intelligence programs.
“By combining GE HealthCare’s medical device and AI competence at global scale with Intelerad’s enterprise cloud and imaging expertise, we will be even better positioned to meet the evolving needs of healthcare providers, simplify complex workflows, and drive digital innovation across the industry,” said Roland Rott, GE HealthCare’s imaging chief.
The companies estimate outpatient enterprise imaging as a $2 billion market and growing, driven by a nationwide shift to move many procedures and scans outside the hospital.
“GE HealthCare’s global scale and extensive relationships with key decision makers across hospital systems will fuel the expansion of our connected imaging software offering,” said Intelerad CEO Jordan Bazinsky. “Together, we look forward to advancing digital innovation in healthcare and delivering more integrated AI-enabled solutions that empower our customers to tackle their greatest challenges.”
The two companies said they expect the deal to close in the first half of next year.
Intelerad’s majority shareholder, Hg Capital, and minority backers TA Associates and Ardan Equity said they will fully exit their investments.