Philips to acquire PACS specialist
AMSTERDAM and BRISBANE, Calif. – Philips Electronics announced that it
intends to acquire Stentor Inc., a leading provider of picture archiving
and communication systems (PACS) used for storing, managing and
distributing digital radiology images throughout hospitals and
Philips will pay approximately US$280 million in cash for Stentor Inc.,
subject to regulatory approval. Stentor’s shareholders have approved the
agreement and transaction.
Stentor expects 2005 sales to grow to approximately US$50 million and
2006 sales annual growth is projected at 50%, according to a news
Stentor will be incorporated into the Healthcare IT business of Philips’
Medical Systems division. From its headquarters in Brisbane, Calif.,
Stentor will become the global centre of Philips’ PACS business.
Vachon (pictured at left), director of medical
IT sales for Philips Medical Systems Canada, noted that the acquisition
provides Philips with leading-edge technology that’s completely
web-enabled. The technology will be further developed by Philips and
will provide existing Philips PACS customers with a powerful upgrade
path, he said.
Vachon observed that the Stentor acquisition, when combined with
Philips’ existing customer base, “gives us a greatly expanded market
share worldwide, making us the second largest PACS provider.”
Philips, he said, is able to offer top solutions in virtually every
major area of healthcare IT, including radiology PACS, enterprise HIS,
and cardiology image management solutions. It also produces top-tier
radiological equipment, such as 64-slice CT scanners, MRI, ultrasound,
digital radiology, and PET/CT machines.
In commenting on the merger, Oran Muduroglu, president of Stentor, said:
“In the healthcare industry, Philips is known for its high quality
medical equipment and for its commitment to customers – an approach we
value. We can now extend Stentor PACS outside of the radiology
department and into other areas of the hospital where conditions like
cancer and heart disease are treated.”
Mr. Muduroglu added: “We are very excited about what this means for all
of our current and future customers, as we combine our strengths in
image and information management.”
Stentor’s PACS technology can transmit medical images – with full
resolution 4 to 16 times faster than any competitor, and with
significantly less hardware costs for hospitals, the company said.
In addition, Stentor’s proven service delivery model and commitment to
customer support is well aligned with Philips’ overall strategy of
designing the solution around the customer and making it easy for the
user to experience.
“Stentor is an exceptional company with very talented people and unique
technology that will significantly strengthen our position in healthcare
IT. The merger of the Stentor Radiology PACS, the number one in multiple
KLAS ratings, and the Philips Cardiology PACS, the “Best Overall
Cardiology PACS Vendor” in the June 2005 KLAS report, gives us exactly
what we want: world-class technology,” said Jouko Karvinen, president
and CEO of Philips Medical Systems.
By merging with Stentor, Philips – the market leader in patient
monitoring systems and the second largest global manufacturer of medical
diagnostic imaging and monitoring equipment – can offer hospitals and
other customers a complete package of state-of-the-art medical scanners
along with Stentor’s best-in-class PACS products to handle the large
volumes of imaging data generated by medical scanners.
In addition, Stentor and Philips have highly complementary geographic
footprints allowing for more rapid deployment of Stentor’s products into
Europe and Asia, while providing Stentor’s US customers with a greater
choice of medical equipment. Combined, Philips and Stentor will have
PACS installed at over 1,600 healthcare institutions worldwide, and will
be second largest in the global PACS market, according to a news
According to an October 2003 report by the U.S. General Accounting
Office, less than 10 percent of hospitals had replaced paper charts with
EHR, and the U.S. Center for Medicare & Medicaid estimated that in 2004
less than 5 percent of U.S. healthcare spending went into IT – much
lower than in financial institutions and other service industries.
In 2003, Philips embarked on its vision for healthcare IT through the
launch of an alliance with Epic Systems Corp. of Madison, Wis., a
specialist in electronic patient record systems that can be used
By acquiring Stentor, Philips will be able to equip EHRs with diagnostic
quality medical images that can be viewed throughout the hospital and
via the Internet.