Royal Philips has today announced an agreement to acquire the Healthcare Information Systems business line of Carestream Health Inc. The expectation is that combining Carestream’s cloud-based enterprise imaging platform with Philip’s radiology informatics products (including its own enterprise imaging solutions), will not only augment their overall technology platform, but will expand Philip’s footprint in Latin America, Europe, and Asia, where Carestream has been working to gain an installed base of healthcare systems.
Among the specific products included in the deal are Carestream’s vendor neutral archive (VNA), imaging viewers, and tools for multimedia reporting, workflow management, clinical analytics, and business analytics. With Carestream’s VNA, Philips can push further into a full enterprise imaging solution, while increasing their position as a facilitator of interoperability. This follows Philips’ partnering with Hitachi Data Systems for VNA in 2016, and the 2017 acquisition of Forcare for interoperability and workflow solutions.
Carestream’s divesting of their information systems portfolio is not surprising as it comes at a time when revenue growth for VNA has slowed, and continued consolidation among both providers and vendors is expected. This divestment allows Carestream to focus on their medical imaging, dental and industrial films, non-destructive testing, and precision coating businesses, while providing inorganic growth for Philips in addition to an expanded informatics platform. As noted by Ludovic d’Aprea, Carestream’s General Manager for Healthcare Information Solutions, “By becoming part of Philips, the Healthcare Information Systems business will have a greater opportunity to thrive and grow. Both organizations share a commitment to meaningful innovation which is deeply embedded in each company’s culture. Customers will have access to a broader portfolio of healthcare IT solutions to simplify medical image management, enable effective collaboration and enhance patient care.” The Healthcare Information Systems business and its 900 employees will become part of Philips’ Healthcare Informatics business within the Diagnosis & Treatment segment.
IHS Markit expects the global market for healthcare IT (including EHR, PACS, RIS, CVIS, VNA, and IE) to reach $21 billion during 2019, and continue to grow at a CAGR of 4.6% through 2023. The sale is expected to close during the second half of 2019, and will further strengthen Philip’s market share across all product lines. The companies will continue to operate independently until the deal is complete, the financial terms have yet to be disclosed.