Dive Brief:
- GE Healthcare announced Thursday it will acquire BK Medical from private-equity firm Altaris Capital Partner for $1.45 billion to broaden the $3 billion ultrasound business into surgical visualization, used to guide surgeons during minimally invasive and robotic surgeries.
- CEO Kieran Murphy said the cash deal, expected to close in 2022, will help expand GE Healthcare beyond its diagnostics portfolio into surgical and therapeutic interventions, with high-single-digit return on invested capital anticipated by the fifth year. BK Medical, headquartered in Boston and Copenhagen with more than 650 employees, is seeing double-digit revenue growth and GE expects the company to deliver "rapid" revenue growth as well as margin expansion and free cash flow growth.
- GE wants to capitalize on the "fast-growing" surgical visualization segment, with technologies meant to provide surgeons with real-time imaging and navigation capabilities. Ultimately, GE's goal is target the full continuum of care, from diagnostics through surgical and therapeutic interventions.
Dive Insight:
Surgeries have become more digital in recent years, with procedures aided by robotics and other tech making up 15% of all surgeries, one study published in JAMA last year found. Players from giant Medtronic to lesser-known tech startups are getting into the space.
Intra-operative ultrasound technology is meant to help surgeons see inside patients' bodies in real time during surgeries, providing them with visual information to help them make better decisions.
BK Medical, which has operated for 40 years in the imaging space, has a global installed base of more than 14,000 ultrasound platforms. In addition to helping guide surgeons during minimally invasive and robotic surgeries, BK Medical's visualization platform is designed to enable them to visualize deep tissue in neuro and abdominal surgery procedures as well as ultrasound urology.
"Adding the fast-growing and relatively new field of real-time surgical visualization to GE's pre- and post-operative ultrasound capabilities will create an end-to-end offering through the full continuum of care — from diagnosis through therapy and beyond," Roland Rott, president and CEO of GE Healthcare Ultrasound, said in a statement.
GE Healthcare's pharmaceutical diagnostics business in May announced the acquisition of Zionexa, a French maker of in-vivo oncology and neurology biomarkers. The financial terms of the deal were not disclosed. Zionexa's FDA-approved positron emission tomography imaging agent Cerianna is intended to provide more targeted treatment for metastatic breast cancer patients and GE's goal is to make it available to 75% of these patients in the U.S. by 2023.
Similar to Zionexa, BK Medical operates in the precision health segment in which data is used to provide more targeted, predictive and personalized care, which is where GE contends healthcare is moving.
Murphy in Thursday's announcement made the case that the BK Medical buy will accelerate GE Healthcare's growth in precision health by "simplifying decision-making for clinicians and equipping them with greater insights to deliver faster, more personalized care for their patients."
Murphy, who has served as CEO of GE Healthcare for four years, will be replaced at the end of 2021 by Integra LifeSciences CEO Peter Arduini.
