IBM is acquiring medical image company Merge Healthcare for $1 billion to combine their tech with the newly formed Watson Health unit. As part of the deal, Big Blue will get access to 7,500 U.S. healthcare sites, as well as most of the world’s leading clinical research institutes and pharmaceutical firms to manage a growing body of medical images.
Watson’s cloud-based healthcare computing system can analyze high volumes of data, understand complex questions posed in natural language and propose evidence-based answers. With the addition of Merge Healthcare’s data, Watson will be able to provide answers to even more questions and eventually use medical images to deliver better diagnosis. The deal, according to IBM, will allow Watson to “See.”
IBM plans to leverage the Watson Health Cloud to analyze and cross-reference medical images against a deep trove of lab results, electronic health records, genomic tests, clinical studies and other health-related data sources, already representing 315 billion data points and 90 million unique records. Merge’s clients could compare new medical images with a patient’s image history as well as populations of similar patients to detect changes and anomalies. Insights generated by Watson could then help healthcare providers in fields including radiology, cardiology, orthopedics and ophthalmology to pursue more personalized approaches to diagnosis, treatment and monitoring of patients.
Merge Healthcare shareholders will get $7.13 per share at a premium of 31.8 percent to Wednesday’s close. The equity portion of the offer is valued at $713.1 million, according to Reuters calculations based on 100 million Merge Healthcare shares outstanding as of June 30.
In recent years, IBM has been expanding aggressively in the healthcare IT sector. The Merge deal is the company’s third major health-related acquisition since launching the Watson Health unit in April.
“Organically, we will continue to build and invest from a research perspective in core technologies,” said Stephen Gold, vice president, IBM Watson. “We will compliment and supplement that with acquisitions.”