Siemens said it plans to combine its medical industrial equipment and other technology products with Shared Medical's expertise in providing consulting services and computer systems integration specifically for health care providers, the companies said in a statement. With the acquisition, Siemens said it will be able to offer its health industry clients a more complete line of services.
Under terms of the deal, Siemens said it will purchase all of Malvern, Pa.-based Shared Medical's outstanding shares at a price of $73 per share. The companies said the value of the deal is approximately $2.1 billion.
The move follows a similar play Siemens made two months ago when it agreed to acquire another U.S.-based services company that handled computer repair, network management and other computer support functions for its clients. Siemens bought New York-based Entex Information Services for a cash price of about $105 million and said the acquisition would help beef up its services operation in the United States by adding 5,000 more technical employees.
Today's deal, which has already received approval from Shared Medical's board, is subject to certain closing conditions, including regulatory approvals, the companies said.
In other news, Shared Medical reported a decline in quarterly profits due to an industry slump in new software sales, which in turn drove down demand for large computer systems installations. Shared Medical said first-quarter net income was $2.7 million, or 10 cents a share, compared with $18.3 million, or 68 cents, for the same period in 1999. Analysts polled by First Call expected the company to earn a much higher 29 cents a share.