IBM to acquire medical image firm Merge Healthcare for $1 bn

IBM Corp is acquiring medical image company Merge Healthcare Inc in a $1 billion (roughly Rs6,373 crores) deal.

IBM plans to combine Merge combine it with its newly formed health analytics unit, powered by its Watson supercomputer.

Watson is an artificial intelligence system that can answer questions posed in a natural human language. The system named after first CEO of the company Thomas J Watson was developed as part of its DeepQA project.

The company plans to combine data and images from Merge Healthcare's medical imaging management platform with Watson's cloud-based healthcare computing system.

The deal would allow physicians and researchers collate and analyse data such as patient's medical and family history, similar data from other patients as also clinical research, trials and outcomes.

"Imaging is central to effective diagnosis and treatment ... but it is increasingly important to share these images between providers to deliver high quality, cost-effective care," Dougherty and Co analyst Brooks O'Neil wrote in a note. (See: IBM to help boost Cleveland Clinic's genomic research for cancer care pilot).

IBM is aggressively pursuing an acquisition strategy in the healthcare IT sector strategy. The Merge deal comes as 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," Gold told Reuters.

Data and images from Merge Healthcare's medical imaging management platform would be combined with the cloud-based healthcare system that Watson uses, which would allow the system to analyse vast amounts of data.

The goal is to help physicians analyse medical and family history data from patients, and combine it with clinical research.

With this, IBM hopes to provide cost-effective care that was at the same time of high quality.

The move would give IBM access to 7,500 healthcare sites across the US.

Merge Healthcare shareholders too would benefit from the acquisition. They would get paid $7.13 per share, which was a premium of 31.8 per cent of the share's price at the close of Wednesday.