Tag Archives: Acquisition

Signify Premium Insight: GE’s Ultrasound AI Acquisition

GE HealthCare has continued to make headlines after spinning out from the broader GE umbrella, making its second acquisition in as many months with a deal for Caption Health.

The move follows GE HealthCare’s January acquisition of Imactis, and sees the healthcare giant pick up one of the better established ultrasound AI vendors. Caption Health specialises in offering ultrasound guidance AI solutions, allowing less experienced users to conduct ultrasound imaging exams.

Given the ability of Caption Health’s solutions to facilitate the use of ultrasound by novice users, GE will first roll out the tool to its point of care and handheld ranges, but there are also opportunities across its portfolio.

Signify Premium Insight: To Dream and to Do – GE Stands Alone

Earlier this month, years of planning and preparation came to fruition as GE HealthCare successfully floated on the Nasdaq exchange as an independent company. There was considerable appetite for the new entrant, which saw shares up 8% at the close of its first day trading.

While the spin off has been well received by investors, what does the future look like for GE HealthCare itself?

The Signify View

Breaking free from the wider concerns of the GE conglomerate will no doubt be both liberating and invigorating for the stalwart healthtech vendor. The move means that GE HealthCare’s destiny is almost entirely in its own hands. It will no longer have to return profits to the conglomerate should other GE businesses such as Aviation or Energy need support amidst difficult conditions in their own markets.

More significantly, however, spinning out of the larger conglomerate gives GE HealthCare a chance to stand alone as a more streamlined and reactive business, answering more readily to the calls of the markets it serves. Much of the work to remake GE HealthCare into a more focused vendor has already been undertaken. The spin-off has, after all been mooted for some time, and several times, in preparation, various units and operations have been divested. Some of these have been sensible moves; its sale of its finance unit in 2015, for example. With hindsight, however, other moves look less wise. Given the growing interest in digital pathology, the 2018 sale of Omnyx to Inspirata, itself recently acquired by Fujifilm, could have been short sighted.

Beyond this focus afforded by the spin-off, as a newly independent company, GE HealthCare will also be able to increasingly chart its own course and follow its own priorities. There are several areas where such a focus could be rewarded. Among the greatest opportunities afforded the vendor are in the development of digital tools.

Digital Direction

GE can already boast a strong digital offering, highlighting in its financials that it derives around $1bn in revenues from its digital offerings. However, sizable opportunity remains. GE’s chief rivals, Siemens Healthineers and Philips also have strong digital capabilities, however both have tended toward building their digital prowess in specific clinical areas. GE has, however, been more generalist in its approach. With its Edison Digital Health Platform and Command Center software, GE has the chance to cultivate a broader workflow toolset bringing together disparate systems within a providers’ network in order to present clinicians with aggregated and indexed patient data.

Achieving such a system represents a considerable challenge. It would require GE to bring together capability that currently resides across a very fragmented assortment of platforms and vendors. Not only does this present technical hurdles, a front on which so far, GE has been performing strongly, it also is challenging from a commercial perspective. The broader the remit of a digital solution that is being sold, the more stakeholders are potentially involved. As such even identifying the key decision maker, let alone convincing that person that a particular solution will be most beneficial for their provider network, is difficult. This is particularly true for the likes of GE, that is targeting a broad user base. It may be able to make compelling arguments to the individual users of a system at a departmental level, but if they are trumped by enterprise-wide decision makers, whose primary concern is often cost, it could be difficult for GE, or another vendor, to make inroads. If GE is able to continue to deliver compelling digital products, and navigate this governance side of hospitals, however, it will be well placed to capitalise on an as yet untapped appetite for holistic digital provision.

Acquisitive Ambition

Beyond such broad aims the float of GE HealthCare can also enable the company to make more significant strategic plays, including freeing capital for acquisitions. On this front GE has already made headway. One of the broader trends in medical imaging is a more integrated relationship between diagnostics and therapeutics, with the latter representing another sizable opportunity for the vendor. Last year GE announced it was buying BK Medical, an interventional ultrasound specialist, while earlier this month the vendor announced it is picking up IMACTIS, an image-guided therapy firm.

Both acquisitions will strengthen GE’s portfolio, broadening its capabilities and enabling the vendor to seal ever more holistic deals. However, while it does allow GE to offer its customers additional capability directly, it does not offer a transformative change.

This is typical of the type of acquisition that GE is likely to make in the immediate future. While the vendor has highlighted its plans to begin making acquisitions, these are likely to be additional ‘tuck in’ deals rather than the sort of deals that will reshape the business for the future.

This echoes one of the potential criticisms of GE Healthcare’s post-IPO plans, that the lack of grand acquisitions or announcements could be seen as a lack of vision or ambition. It is true, after all, that GE’s central competitors have particular areas in which, by reputation at least, they are leaders. Philips, for example, can use its strength in cardiology to open wider deals. Siemens Healthineers, by dint of its Varian acquisition, can boast the most complete oncology offering. GE lacks such a speciality, and, although there are areas in which it could hang its hat, it has not yet, at least, announced or intimated any such plans.

Continuing Appeal

That, however, is OK. While the IPO presented an opportunity to share a vision, and capture more mindshare, there was no necessity. GE HealthCare, after all, leads the market in many of the segments in which it competes. It is and remains one of the global superpowers in medical imaging and the broader healthcare technology space. What’s more, despite GE now facing some headwinds stemming from its past focus of seeking growth in emerging markets, the vendor’s forecasts for the coming year are strong. Siemens Healthineers expects 2023 revenues to be essentially flat compared to FY2022, albeit including a significant hit from the expected decline in Covid antigen testing. Philips meanwhile struck a downbeat tone in its latest Q3 2022 results announcement, forecasting mid-single-digit decline in comparable sales in its Q4. GE though, seemed strong. In its preliminary Q4 results GE HealthCare noted revenue growth of 4%, and forecasted further revenue growth in 2023 of 5-7%, with margins of 15-15.5%, 50 basis points higher than the previous year.

Given such forecasts, GE doesn’t need to reinvent the wheel. Amidst wider inflationary pressures and logistic challenges, the vendor doesn’t need to make transformative changes. Instead, doubling down on its fundamentals and hitting its targets, particularly that of margin expansion, will be enough to keep investors happy. Going into its first year as an independent vendor, this is a sensible and practical strategy. Several carefully considered tuck-in acquisitions can add to these measured targets, allowing the vendor to capitalise on add-on sales without deviating from a well-defined path. While other plans, such as the considered development of certain prestigious halo products, for example can help the vendor capture headlines and maintain and elevate its status as one of medical imaging’s technical leaders.

Over time, assuming GE Healthcare does meet its targets, and none of these ancillary activities detract from its core focus, there may come a time when the company can look further ahead and strike out on a bold new journey to tackle grander, epochal health challenges head on. Until then, confident consistent capability, with just a dash of greater vision, will be enough to lay a solid foundation.

Signify Premium Insight: Tempus’ Arterys Acquisition and AI’s Turning Tide

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Medical imaging AI vendor Arterys recently announced it has been acquired by Tempus Labs (Tempus), in a move that ranks among the largest acquisitions of an AI vendor to date. The move continues AI’s march beyond its radiology bastion, with Tempus, backed by $1.3bn in VC funding, among the leaders in the precision medicine and treatment discovery segment.

The price Tempus has paid for Arterys – a vendor which has raised more than $70m in funding – or the exact nature of its plans for the company, have not been disclosed, although it is likely that Arterys will continue to offer its core radiology products, alongside supporting Tempus’ other operations in the preclinical and life science sectors.

The Signify View

Consolidation has appeared inevitable in the growing AI market for several years, however, until 2020, most acquisitions were small, as AI vendors sought to take advantage of competitors’ technology and add it to their own portfolios. Examples of such moves include Terarecon’s acquisition of McCoy Medical Technologies (for its Envoy AI platform) and Circle Cardiovascular Imaging’s acquisition of Corstem in 2019.

Latterly, however, acquisitions have begun to adopt a new timbre. Increasingly, when AI vendors have sought to incorporate a peer’s functionality into their own tools, they have turned to partnerships, rather than acquisitions, a far more flexible approach. In 2022, however, a new motivation for acquisitions grew. Companies whose core business is outside radiology, have more commonly looked to radiology AI companies to bolster their capability, with outpatient imaging Radnet acquiring Aidence and Quantib and nference acquiring Predible. Similarly some AI vendors themselves have pivoted towards lifesciences, a bid, in part, to avoid some of the challenges that the clinical use of AI presents.

Tempus’ acquisition of Arterys continues this trend. Tempus, with a heritage in life sciences, has now moved to capitalise on the success seen in radiology AI. In this regard, the precision medicine vendor has also been bold in its choice of target. At 11 years old, Arterys is one of the longer established medical imaging AI vendors in the space, and one of the first to receive US-FDA approval for a deep learning algorithm.

One Swallow Does Not a Summer Make

However, as seen in other instances, an effective algorithm alone does not necessarily translate into a successful business. Despite Arterys early success, it has also modified its strategy multiple times, transitioning from a cardiac algorithm developer, into a more generalist algorithm developer, and then more recently becoming one of the first independent algorithm developers to commercialise a native platform. Such pivots are driven by both ambition and necessity as medical imaging AI is, after all, a very competitive market, with many players competing for often-scarce dollars.

Amidst this competition, the acquisition will give reassurance to Arterys and ensure it can continue to offer its radiology products, while also benefitting from greater investment and allowing it to target a much more sizable life sciences opportunity as part of Tempus. Thanks to the funding, it will, in the near term at least, continue to be able to enhance its native algorithms, some of which are highly differentiated from those of their competitors such as its cardiac and neurological 4D flow solutions. It will also bolster the vendor in its efforts to become among the largest independent platform vendors, with the backing of its new owner giving it the war-chest to battle many of the segments’ other AI platform vendors.

Over the longer term, however, the boundaries between Arterys and Tempus are likely to be blurred. There will be less ability for the vendors to run as distinct entities and Arterys will be consumed by Tempus. As this happens, Tempus, leveraging the strengths of Arterys, will harbour a much stronger offering in life sciences and pharma, making strong headway on its precision medicine ambitions.

Using the acquisition’s medical imaging AI capability, Tempus will aim to enhance or even alter the diagnostic pathway, in a manner comparable to some of medical imaging AI’s most successful vendors.

Pharma Focus

Further to these designs on diagnostic pathways, Tempus is also set to use Arterys to redouble its efforts on the pharmaceutical space. Vendors have made commercial headway with some applications of medical imaging AI, with detect and triage applications gaining most success to date. Another use, quantification, has so far struggled to gain traction in radiology, and AI some vendors have instead focused on detect and triage capabilities.

Now, however, the opportunity for collaboration between Tempus and Arterys, and the combining of their portfolios, will enable the value propositions of both companies to be brought to the fore in pharmaceuticals, as well as clinical practice. As such, Tempus will continue towards its precision medicine ambitions, using Arterys’ capabilities to help develop an overarching platform that can leverage lots of sources of data, including real world data, to deliver the best personalised treatment for the patient.

These ambitions will, however, not be realised without first confronting come significant challenges. This will be particularly true for Arterys’ hopes in radiology. Other vendors have whole-heartedly focused on radiology, developed broader solutions which they have then pushed forward, fought to qualify for reimbursement, and have ultimately given providers a clear reason to adopt their solutions.

For Arterys, on the other hand, the motivations for adoption may not be so clear. While it does offer competitive solutions, unlike some of its most successful peers, it has not yet qualified for reimbursement in the US. What’s more, although platforms are one of the areas that have garnered the most interest in medical imaging AI of late, it is also a space that has become increasingly crowded. Given many of Arterys’ successes have come through third-party tools hosted on its platform, with only limited success from its natively developed solutions, it risks losing these third-party partners to other competitors, diminishing or at least undermining the value of its platform play.

Broader Approach

These challenges mean that the newly combined company may, over time, cease to focus so heavily on medical imaging AI. Any vendor that is to succeed in medical imaging must offer significant clinical value to providers. Tempus will hope to be able to offer this value, quickly scaling Arterys’ platform with an even broader range of algorithms.

Whether they choose to do this, however, is an entirely different question. So far, payoffs in life sciences have frequently dwarfed those in radiology AI, so Tempus may simply prioritise that market, letting Arterys’ traditional ambitions fall by the wayside.

Either way, for Arterys, the acquisition will be welcome news. The vendor has raised considerable funds, but, considering some of the extraordinary funding rounds, the qualification for reimbursement, and clinical guidance secured by some others in the medical imaging AI space, Arterys could start to look like an underdog. As it is, the acquisition by Tempus gives Arterys’ early investors a healthy exit, while also providing the vendor with the funds to fight battles in the radiology AI market and beyond.

There are other vendors that would also consider such an approach welcome news. Earning revenues to justify investors’ funding is proving harder for many vendors than they may originally have expected. Funding the clinical validation and sales activities that will enable them to target reimbursement and greater clinical adoption is tough, and unless vendors have the resource for such activities, they may increasingly struggle as their capital runs out.

Against such a backdrop, hindsight might make it clear that Arterys has been fortunate in its timing. Increasingly, larger companies, whether life science firms, modality vendors or even imaging IT firms might start to pick up successful AI vendors at ever more attractive prices as their funding dwindles. A daunting prospect for AI vendors, but perhaps the next step forward in the technology’s broader adoption.

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Signify Premium Insight: What Intelerad Hopes to Make with Life Image Acquisition

This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify Research. To view other recent Premium Insights that are part of the service please click here.

Intelerad has continued its streak of acquisitions by buying up medical image exchange vendor Life Image. The move, along with its previous acquisition of another image exchange vendor Ambra in Autumn 2021, means the enterprise imaging vendor has now combined two of the top three competitors in image exchange, and has given itself a clear market leadership position.

Intelerad hopes that the acquisition will enable the vendor to capitalise on the interoperability focus of the 21st Century Cures Act in the US and should help providers more easily share images across their networks, preventing information sharing bottlenecks and use of legacy processes such as burning CDs. Given Intelerad’s recent run of acquisitions and the integration that they require, is adding another company into the mix really the best use of the company’s resources?

The Signify View

As detailed in several previous Premium Insights, since Hg Capital took a majority holding in Intelerad in February 2020, the imaging IT vendor has sought to expand its capability, and secure market share by making a succession of acquisitions. These have included a variety of companies, including cardiovascular information systems vendor LumedX, image management platform provider Digisonics, UK based enterprise imaging company Insignia, mammography screening management software vendor PenRad and several others. By making these acquisitions, Intelerad has not only been able to grow its position in the market, but it is assembling the capabilities it requires to create a cloud-based multi-ology enterprise imaging platform.

One of the acquisitions to pave the way for this ambition was Ambra, a deal which not only netted Intelerad a growing, profitable business, but also helped to round out Intelerad’s radiology offering, bringing cloud-based PACS, image exchange and VNA to its platform. Further, by buying a vendor offering such capability, Intelerad acquired a toolset that can help bring together its other disparate acquisitions into a cohesive whole.

The latest acquisition, of Life Image, builds on this momentum. It adds another, larger, successful image exchange business to the vendor’s portfolio, cements Intelerad as the market leader in image exchange in the US and adds further tools that will help Intelerad integrate its host of acquired companies.

A Question of Acute

Life Image also opens new sales opportunities for Intelerad. The enterprise imaging vendor’s customer base is heavily weighted toward the outpatient radiology segment. While this is a lucrative and growing market, it is also one that is increasingly being targeted by major international vendors with companies such as GE HealthCare and Change Healthcare, amongst others, harbouring designs on the segment.

Life Image, on the other hand, is primarily focused on larger provider networks, and academic institutions. Flourishing in this market has, so far, proved somewhat difficult for Intelerad, so the vendor will look to utilise Life Image’s installed base and network of contacts to aid in its growth of the large, lucrative mainstream acute market, including the government health sector. This is especially true given the vendor agnostic nature of image exchange systems. For a hospital to adopt image exchange from Life Image, there is no requirement that it sever ties with its current image IT vendor and enter into a new partnership with Intelerad. Life Image’s image exchange could therefore not only prove to be attractive as a standalone product, but allows Intelerad a ‘seat at the table’ when providers look to update existing imaging IT systems. This opportunity can be enhanced by the intelligence Life Images’ platform can provide on incumbent imaging IT vendors volume and performance, offering Intelerad useful insights with which to tailor their own sales pitches when contracts come up for renewal.

This isn’t Intelerad’s first attempt at targeting the acute sector, with its previous acquisition of LumedX an earlier strategy for gaining ground in the market. However, the fact that Intelerad is continuing to target the acute sector with Life Image highlights the importance of the acute market .

Additionally, Life Image, as well as Ambra, to a certain extent, are also well placed to make progress in the market thanks to recent changes in policy, with the 21st Century Cures Act requiring providers to be able to provide patients with their medical imaging data. This initially focuses on general health data and medical history, but, over time will increasingly address all kinds of data, including medical images. As the ability to share images becomes a necessity for providers, Intelerad, given its ownership of Ambra and now Life Image, two of the three largest vendors in the image exchange space in the US, finds itself in a position which appears increasingly promising.

Real World Advantages

Beyond offering opportunities for increased sales of Intelerad products within the acute space, the acquisition of Life Image also builds on another revenue stream. With the access to the range of medical imaging data that it brings, even if Intelerad doesn’t itself own the images, the enterprise imaging vendor can better position itself to serve hospitals and customers through the establishment of a real-world data platform.

The growing importance of health data, including medical imaging cannot data be understated, and hospitals are increasingly aware of the value of that data. The acquisition of Life Image allows Intelerad to further tap into the value of this data, as customers from areas such as pharmaceuticals turn to this data to improve the efficiency of drug discovery, for example. While the true value of Life Image will take some time to realise in this regard, given the nascency of the market, the fact that Intelerad is already preparing for such opportunities places it ahead of the curve compared to most of its direct competitors.

Making a Whole

The picture isn’t universally rosy, however. While the acquisition of Life Image is no doubt a sensible move, and invariably will have been somewhat opportunistic, it doesn’t solve Intelerad’s fundamental problem, deriving value from its long list of acquisitions greater than the sum of the constituent parts.

There are also some gaps in Intelerad’s lineup. The vendor, does, for instance, harbour some AV capability, but, in lacking a fully-featured in-house solution, relinquishes some control. The same is true of AI, with a partnership with Blackford Analysis bringing machine learning tools to Intelerad’s customers, but again, offering less control than an equivalent platform owned by Intelerad. Furthermore, those companies that have so far been acquired continue to effectively sit as a ‘house of brands’ rather than a single cohesive whole.

This is understandable, the integration of such a range of capabilities into one holistic platform is no trivial task. However, the imaging IT market is slow moving, with opportunities to tender for contracts and displace incumbents few and far between. To stand a chance of securing such deals, the vendor does not need to have a fully-integrated cloud-based system ready to deploy right away, but it should at least offer potential customers an outline of its plans. Even simply offering a roadmap would help the vendor give confidence to providers attracted to the potential offered by Intelerad’s acquisitions, but hesitant to commit to the company’s system.

This guidance for customers and potential customers should be among Intelerad’s priorities for RSNA. There will likely be some outline for existent customer and key targets already being quietly shared behind closed doors. But, by committing to a roadmap at the industry’s largest event, promoting its vision and building momentum for its upcoming integrated solution, Intelerad can ensure that the acquisition of Life Image adds not just a strongly performing company to its already impressive roster, but, adds a toolset that can help with a much larger ambition.

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Signify Premium Insight: Screening Marks the Next Step in Intelerad’s Grand Ambition

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Intelerad added another company to its growing portfolio in August, acquiring breast and lung screening specialist PenRad Technologies. The acquisition of the vendor, which provides software to enhance the efficiency of screening programmes, is the latest in a string of purchases including Ambra Health, Insignia and Lumedx among others.

The deal, which was of an undisclosed value, will bolster Intelerad’s offerings for mammography and lung workflow tools and analytics. Its three core products, PenRad for breast imaging, PenLung from lung screening, and PenTrac for patient tracking and reporting will, according to Intelerad, help radiologists using its enterprise imaging platform to optimise workflows and manage screening programmes more efficiently.

The Signify View

Since Hg Capital became the majority investor in Intelerad in 2020, the vendor’s plans have, over time, become clear. Intelerad has set its sights on building out a fully-fledged enterprise imaging offering, a system that will cater to the needs of most providers and offer a genuine alternative to both other specialist imaging IT vendors as well as the solutions offered by larger international medical imaging vendors.

The acquisition will help in this regard. The integration of screening tools into the core imaging IT platform, while not unique, does add additional competency that will allow the firm to compete against some of the largest imaging IT providers. Furthermore, it will also help differentiate Intelerad from its current peer group of small and mid-size imaging IT “challenger” vendors. Such differentiation will also be particularly attractive to the outpatient sites that presently form the majority of Intelerad’s customer base.

Screening tools are also likely to increase in importance over time. Screening programmes in the US are well established for mammography, but are growing in sophistication, with increased uptake of more advanced modalities such as 3D mammography, ABUS and MRI, as well as additional reporting on harmonised diagnostic metrics such as risk scores and breast density. Another factor that could also mean providers are more willing to invest in tools such as those offered by PenRad are changes to reimbursement rates. Lower rates of reimbursement for screening mammography will increase the importance of screening efficiency. For screening providers, which rely on high volumes to drive revenues, any tools that enable greater reporting automation and more women to be screened, could therefore be very valuable.

In the US, Lung screening on the other hand is still underutilised, with patients often choosing not to participate in screening programmes when they are available. Despite this, the uptake of screening is still being encouraged, with, for example changes to screening rules making more people eligible to participate. Moreover, given the nascency of lung screening so far, PenRad’s lung assets will further differentiate the Intelerad offering.

Timing is Everything

The timing of the acquisition also makes sense. Following on from the Covid 19 pandemic, there has been a greater emphasis of care in outpatient settings. This is a market that Intelerad can serve effectively, although, without PenRad it lacks some of the specialist tools to be able to effectively capitalise on the requirements of screening providers. There are, for example, specialist workflow elements, registry integration requirements, and AI integrations which, among other needs, are distinct enough from typical radiology use cases to necessitate the acquisition if Intelerad is to succeed in the screening market.

While many PACS vendors offer some screening capability, these complexities mean that many informatics vendors also lack the specialist screening capability that Intelerad has acquired through its purchase of PenRad. In many cases, PACS vendors will “white-label” tools from vendors such as PenRad, or work with breast modality workstation vendors such as Hologic. Developing this capability in-house is not impossible for a vendor such as Intelerad, but it would have taken time to get right. By buying PenRad, Intelerad gets this capability right away, while also preventing any of its competitors picking up the firm.

The deal also makes sense for PenRad. While its tools are valuable, as a specialist company it is at risk of enterprise imaging vendors, whether smaller specialists or larger, broader imaging vendors and growing breast AI specialists increasingly encroaching on its turf as they too look to capitalise on the resilient screening market.

Acquisitive Ambitions

Despite the potential that the acquisition of PenRad offers in the outpatient and screening space, the capability it brings is not transformative for Intelerad, nor will it likely mark the end of the vendor’s acquisitive streak. Intelerad is, after all, focused on assembling a complete enterprise imaging solution, and, as long as Hg Capital is willing to support the vendor, Intelerad will look to make deals for the remaining gaps in its capability.

One such opening would be for digital pathology capability. While such tools are not yet necessitated by providers, they are, as discussed in a previous Premium Insight, increasingly looking for their vendors to be able to offer a plan which allows them to take advantage of digital pathology when they choose to. This requirement has led several imaging IT vendors to ensure they can meet this need, with Sectra and Philips offering the capability in-house, while the likes of Siemens Healthineers and Fujifilm have chosen to partner with Proscia and Inspirata respectively to offer the capability. Not to be outdone, Intelerad could choose to pick up a company focused on digital pathology and integrate it with its broader imaging IT offering. However, given the nascency of digital pathology, particularly in Intelerad’s key market of the US, partnering might represent a viable near to mid-term alternative as it has for Fujifilm and Siemens. Partnership is also an option that Intelerad is also willing to take, as illustrated by its partnership with Blackford Analysis for AI platform capability, for example.

Another area arguably more deserving of Intelerad’s focus is Advanced Visualisation (AV). Not only does this absence represent a gap compared to most of its peers, being able to offer AV capability would give the vendor a better chance of sealing deals at acute sites and helping the company expand beyond its core outpatient customer base. There are opportunities for Intelerad to offer white label solutions to customers, however, this route is more limited in terms of customisation and does not offer the same long-term certainty as offering solutions developed in house. Taking such an approach also means that Intelerad would not be able to keep all the revenues from the solution, a factor which could impede its ability to innovate in the future. Solving the “AV” challenge is not urgent, but as AV is increasingly de-coupling from modalities sales channels and gradually overlapping with AI image analysis tools, the firm will not want to wait too long without a clear plan of how to address the AV gap in its offering.

Acute Solutions

There are other capabilities that are also increasingly important, particularly if Intelerad has designs on the acute space. Many deals are now agreed on a long-term basis and include professional service and consulting elements. At present, Intelerad could miss out on some major contracts given that it is not among the vendors best placed to deliver on these requirements at scale and on multiple geographic fronts, a headache that has also challenged fast-growing peer Sectra. Other elements also important given growing pressures on imaging services are fleet management and operational analytics tools. Not only would such tools stand Intelerad in better stead as it competes for major deals with acute providers, but these allow the vendor to use them as a foundation to increasingly engage in lucrative service activities, helping providers realises their performance targets and meet their KPIs for example.

While adding these and other capabilities would not be cheap, if Intelerad were willing to invest the time and resource in fully integrating them, it would emerge with one of the most complete enterprise imaging solutions available. This in itself is no guarantee of long-term success; the imaging IT market moves slowly, and organic growth is hard to come by. As such, further acquisitions may be necessary for Intelerad to continue to gain market share and the revenues that it brings. However, the investment made by Hg Capital, along with additional investment from TA Associates, suggests that the vendor is not finished, and that more acquisitions are likely on the way.

The more pertinent question is how long HG continues to back Intelerad. It has proved its commitment in the near term, but at some point, it is likely to want to exit and realise a return. When this is, and how advanced the integration of its acquisitions is at this point is something that remains to be seen.

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