IBM to buy Merge Healthcare in $1 billion deal

Thu Aug 6, 2015 2:56pm EDT
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By Abhirup Roy and Ankur Banerjee

(Reuters) - IBM Corp (IBM.N: Quote) said it would buy medical image company Merge Healthcare Inc MRGE.O in a $1 billion deal and combine it with its newly formed health analytics unit, which is powered by its famous Watson supercomputer.

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

The system analyzes high volumes of data, understands complex questions posed in natural language and proposes evidence-based answers.

The deal will help physicians and researchers collate and analyze data such as patient's medical and family history, data on others with similar symptoms and 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.

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," Gold told Reuters.   Continued...

A person walks past an illuminated skyline at the booth of IBM at the CeBIT trade fair in Hanover March 14, 2015.  REUTERS/Morris Mac Matzen