Dive Brief:
- RadNet has struck a 230 million euros deal to buy radiology artificial intelligence company Gleamer.
- The takeover, which the companies disclosed Monday, gives RadNet control of devices that are used in more than 25 indications and are forecast to generate about $30 million in annualized recurring revenue this year.
- Buying Gleamer will expand the capabilities RadNet acquired through the DeepHealth buyout in 2020, particularly in X-ray, and accelerate its expansion outside the U.S. Gleamer will be integrated into DeepHealth, a full-owned subsidiary of Radnet.
Dive Insight:
Paris-based Gleamer has received Food and Drug Administration clearance for four devices and has CE marks for six products. The portfolio includes BoneView, software that identifies fractures during reviews of X-rays. Other Gleamer products find lung nodules on CT scans and multiple sclerosis lesions on brain MRI scans.
RadNet has strengthened its AI-enabled imaging capabilities in recent years, buying DeepHealth in 2020 and adding iCAD, See-Mode and CIMAR to its digital health portfolio last year. The company is paying 215 million euros upfront for Gleamer. Another 15 million euros is tied to the achievement of milestones.
On a call with investors to discuss the takeover, RadNet CEO Howard Berger said the ability to round out his company’s routine imaging portfolio is one reason the Gleamer deal was so attractive. Expanding the portfolio will enable RadNet’s hospital partners to have their entire provider network systems, spanning physician groups, urgent care centers and emergency rooms, connected on the same platform.
Prompted by an analyst’s question, Berger compared the offering to GE HealthCare’s capabilities after its $2.3 billion takeover of Intelerad. Berger said there is little overlap between the capabilities, arguing that Intelerad only addresses one part of the IT infrastructure. RadNet has a bigger impact on running the entire radiology department workflow, whether it is hospital- or outpatient-based, the CEO said.
As well as expanding RadNet’s portfolio, Gleamer will strengthen the company’s commercial presence outside the U.S. Sham Sokka, chief operating and technology officer of digital health at RadNet, said on the call that using Gleamer’s radiology AI and workflow capabilities across RadNet's imaging network will improve productivity.
RadNet is also targeting $7 million in cost synergies, Kees Wesdorp, CEO of the company’s digital health division, said on the call. The company, which reported its full-year results Monday, forecasts digital health sales will grow 45% to 55% this year.
RadNet CFO Mark Stolper said on the call that Gleamer will contribute to growth.
