IBM to acquire Merge Healthcare for $1B

IBM today announced its deal to acquire Merge Healthcare, a provider of medical image handling and processing, for $1 billion in cash, to bolster the capabilities of Watson.

The Merge acquisition includes the assumption of the health-care imaging company’s debt, according to IBM spokesman Steve Tomasco. The closing of the transaction is subject to regulatory review, Merge shareholder approval, and other customary closing conditions, and is anticipated to occur later this year.

“Combining Merge’s leading medical imaging solutions with the world-class machine learning and analytics capabilities of IBM’s Watson Health is the future of healthcare technology”, added Michael W. Ferro, Jr., Merge’s chairman.

“As Watson evolves, we are tackling more complex and meaningful problems by constantly evaluating bigger and more challenging data sets”, said John Kelly, Senior Vice President, IBM Research and Solutions Portfolio.

It was just Wednesday that IBM was rumored to be interested in making a large data security company acquisition, but even that might be hard to really move the needle for Big Blue. Over the past few years, IBM has made multiple announcements of $1 billion investments in big data, cloud infrastructure and other cutting-edge technology.

Merge Healthcare shares were up 29.5 percent at Dollars 7 in early trading. In essence, Watson will be able to “see”, IBM said…and eventually save a lot of M.D. eye strain. The company also acquired Phytel in the population health space and Explorys in the cloud-based healthcare intelligence arena. IBM shares were little changed at $156.33. “Insights generated by Watson could then help health care providers in fields including radiology, cardiology, orthopedics, and ophthalmology to pursue more personalized approaches to diagnosis, treatment, and monitoring of patients”.

IBM has been expanding its health-care offerings through partnerships and smaller acquisitions.

In essence, Watson’s vision will be used to analyze and cross-reference countless medical images against genomic tests, lab results, clinical studies, electronic health records, and other data sources.