GE Medical Systems Continues Its Drive to Expand Into Growth Markets

General Electric Co.’s recently announced acquisition of Imatron Inc., a San Francisco-based producer of computed tomography (CT) scanners, demonstrates the company’s strategy to expand its product lines into growth markets. General Electric is making the $201 million acquisition through its GE Medical Systems unit, a global leader in medical technology and information. Imatron, a pioneer of electron-beam tomography (EBT) scanners, produces products that are much faster than conventional scanners and, therefore, are able to test the heart and other internal organs that are in motion. Additionally, Imatron offers repair, training, and other services to other manufacturers of high-tech medical equipment. Electron-beam technology spices up GE Medical’s offerings Calls to GE Medical Systems seeking comment on the deal were not returned but the company’s president and CEO, Joseph Hogan, stated in a news release: “Imatron’s technology is the perfect complement to our offering of computed tomography products. By adding EBT to our world-renowned LightSpeed family, GE Medical Systems will be able to offer a CT scanner to meet every customer need.” Industry analysts say that the acquisition adds some zing to GE Medical’s product line. Imatron’s scanning technology is significantly faster than GE Medical’s imaging technology, they note, and the acquisition provides GE with an additional diagnostic tool for helping to prevent heart attacks. The deal illustrates GE’s desire to acquire good technologies and products with solid growth platforms. At a recent meeting with shareholders, chief executive Jeffrey Immelt reportedly said that his company is eyeing many opportunities to expand its operations through acquisitions, though he added, “I don’t think now’s the time to do a big whopper.” Analysts say that the company does not have to do a megadeal in order to grow but rather can expand by adding a number of smaller players that are in growth markets. Other recent acquisitions include Data Critical Corp., a maker of wireless telemetry and communication technologies for the health care industry, and Coincidence Technologies SA, a designer and manufacturer of synthesis and handling units for positron emission tomography (PET) radiopharmaceuticals. Commenting on the Imatron acquisition, Thomas Zinsli, a London-based manager in A.T. Kearney’s global pharmaceutical and health care practice, says that the company’s EBT technology is “superior and highly complementary” to GE Medical’s product line. “Imatron’s ability to service equipment is also a crucial component of this deal,” he adds. Computed tomography technology is non-invasive, “and that is a hot area in health care right now,” he says. The technology helps to diagnose diseases at earlier stages and minimizes hospital stays, which helps reduce health care costs, he notes. Hospitals are installing this type of equipment in order to gain status, he adds. “Even in a slow economy, it is in the favor of the health care system to invest in this type of technology, since it can help diagnose disease at earlier stages and allow for shorter hospital stays. The investment is well worth it in the long run,” he remarks. Growth in the remote disease diagnosis area Zinsli says that it is very likely that GE Medical will make additional acquisitions in the medical equipment market. Other growth areas, he notes, include remote disease diagnosis and monitoring devices, which capture data and send information to doctors in remote locations, or other technologies that impact how diseases are diagnosed and managed.