Acquisition will open computer aided detection (CAD) imaging technology for the global healthcare market

In order to combine forces on expanding CAD technology, Merge Healthcare Incorporated (NASDAQ: MRGE), a leading health IT solutions provider, and Confirma, Inc., the largest privately-held developer of computer assisted detection (CAD) software for medical imaging, announce that they have entered into a definitive agreement for Merge to acquire Confirma in an all-stock transaction. This acquisition brings Confirma’s patented and proven technologies to Merge’s multiple market channels and international markets, and provides a mechanism to expand adoption of this important technology.

According to Michael Middleton, Assistant Clinical Professor of Radiology, University of California San Diego Medical Center, “The long-term opportunity for CAD in diagnostic imaging is to contribute significantly to the reduction of health care cost, while increasing access to patient care and life saving modalities. As imaging studies grow in size and complexity, measured deployment of CAD and workflow enhancing algorithms for radiology show great promise to accomplish these goals.”

“CAD technology is still at an early adoption phase in the market for most indications, but it has significant opportunity as a tool for reducing imaging costs in today’s healthcare reform environment,” states Justin Dearborn, Merge Healthcare CEO. “Together with Confirma, we believe we can now better realize the long term global potential for this technology.”

Confirma has spent years developing the extensive CAD algorithms, intellectual property and validation required of these highly technical clinical tools. The flagship product, CADstream™, has over 1,200 systems implemented for breast and prostate MRI, and several additional solutions are in development. “Our customers understand the core benefits of CAD as a clinical workflow tool,” says Wayne Wager, CEO of Confirma. “By combining our patented CAD applications with Merge’s broader health IT solutions and global presence, we can better take advantage of current and future growth opportunities and, thus, extend our solutions to more clinicians.”

The all-stock transaction will be based on a ten-day volume weighted average price (VWAP) of Merge Healthcare’s Common Stock, as of the third trading day prior to the closing date and is subject to certain adjustments.