IBM to Buy Merge Healthcare in $1 Billion Deal

Reuters
Updated
IBM Chief Executive Officer Ginni Rometty Speaks At The Economic Club Of Washington
Andrew Harrer/Bloomberg via Getty Images IBM CEO Ginni Rometty

By Supantha Mukherjee

IBM said it would buy Merge Healthcare, which provides medical images and clinical systems, in a $1 billion deal and combine it with its Watson Health analytics unit.

Merge Healthcare shareholders will get $7.13 a share at a premium of 31.8 percent to Wednesday's close, the companies said.

Merge Healthcare (MRGE) shares were up 29.5 percent at $7 in early trading. IBM (IBM) shares were little changed at $156.78.

The equity portion of the offer is valued at $713.1 million, according to Reuters calculations based on 100 million Merge Healthcare shares outstanding as of June 30.

IBM plans to combine data and images from Merge Healthcare's medical imaging management platform with Watson computing platform's image analytics.

Cloud-based Watson computing system analyzes high volumes of data, understands complex questions posed in natural language and proposes evidence-based answers.

The deal is IBM's third major health-related buy since launching its Watson Health unit in April.

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