Elekta AB to Acquire IMPAC Medical Systems, Inc.
Elekta AB and IMPAC Medical Systems, Inc. announced an agreement under which Elekta will acquire IMPAC, a world leading provider of information systems for managing radiation and medical oncology and related clinical practices. The acquisition will enable Elekta, a world leading supplier of advanced clinical solutions for high precision radiation treatment of cancer and for non- or minimally invasive treatment of brain disorders, to offer customers a new, broad array of health care information products for clinical, administrative, outcomes and decision support purposes.
Under the terms of the agreement, Elekta will pay USD 24.00 in cash for each share of IMPAC common stock outstanding, which represents a premium of 22 percent over the IMPAC closing price on January 14, 2005, and equates to a diluted equity value of approximately USD 250 million and an enterprise value of approximately USD 190 million. The merger is contingent upon approval of the transaction by IMPAC’s stockholders, receipt of Hart-Scott-Rodino regulatory approval and other customary closing conditions. IMPAC’s board of directors has approved the acquisition and recommends that stockholders vote in favor of the transaction. IMPAC intends to hold a special stockholders meeting to approve the merger in mid-April and to close the transaction shortly thereafter. Major stockholders of IMPAC, together holding approximately 33 percent of the company’s shares, have entered into agreements with Elekta to vote their shares in favor of the transaction.
Creates leading integrated oncology solutions provider with global reach
Joining forces, Elekta and IMPAC will be able to offer a unique, fully-integrated and seamless solution addressing the entire spectrum of the cancer care process from diagnosis through treatment planning, treatment delivery and follow-up, including cancer registry and decision support.
In addition, the companies’ highly complementary geographic footprints will allow for more rapid deployment of IMPAC’s solutions into Europe and Asia/Pacific, while providing IMPAC’s US customers with greater choice and improved radiation therapy solutions. Elekta’s customers will be able to improve treatment efficiency through access to the full range of IMPAC’s cancer management systems. Combined, Elekta and IMPAC will have relationships with more than 3,000 hospitals and cancer centers around the world, including over 1,300 oncology centers, over 1,100 cancer registry operations and over 400 pathology laboratories in North America.
“The acquisition of IMPAC is an important step in the strategic development of Elekta and our ongoing efforts to improve cancer care,” said Dr. Laurent Leksell, President and CEO of Elekta. “The addition of IMPAC’s strong management and software engineering team creates a significant new dimension to our solutions for cancer treatment,” Dr.Leksell added. “We are looking forward to offering our customers the IMPAC software platform for electronic medical records, laboratory, decision support, and practice management, in addition to Elekta’s comprehensive suite of radiation treatment imaging, planning, and delivery systems for the clinic. This is a dynamic and very complementary combination that addresses an intensifying need for integrated information systems and devices that can lead to faster proliferation of the most efficient and best cancer treatment practices, including image guided radiation therapy.”
Commitment to open connectivity and research driven clinical solutions
While Elekta will be able to provide its customers with a complete “one-partner” solution going forward, both Elekta and IMPAC remain firmly committed to an open architecture, multi-vendor software format. Commenting on this, Dr. Laurent Leksell noted “Open connectivity based on industry standards is of great importance for all customers and supports the continued improvement of cancer care. The acquisition of IMPAC will allow us to assume global leadership in the accelerated development of industry-wide standards and protocols in cancer care in general and in radiation oncology in particular. We invite industry colleagues to take part in this development and we truly believe that all vendors should participate in an effort to make closed, non-compatible systems and vendor-specific connectivity solutions a thing of the past.”
Elekta and IMPAC have a long and successful history of prior collaborations and in October 2004 signed a sales consulting agreement. This, together with ongoing joint development interface standards, has led to the companies reaching a point where a merger of the operations was a natural step. Combining the intensive R&D efforts and unsurpassed joint product development competence of Elekta and IMPAC, product development will accelerate in both information systems and treatment solutions with a focus on improving the entire cancer therapy process. Adding to this, Dr. Leksell noted, “We are truly excited and very pleased to welcome the whole IMPAC team to the Elekta Group — including the three founders, Joseph K. Jachinowski, James P. Hoey and David A. Auerbach.”
According to the agreement, IMPAC will operate as a wholly owned subsidiary under the direction of the current IMPAC President and CEO Joseph K. Jachinowski, who will continue as president of IMPAC while becoming a member of Elekta’s management team. Following the completion of the acquisition, the two companies will work as separate entities but in close cooperation. Integration will take place gradually where it benefits the customers and makes operations more efficient.
“We are extremely excited about the avenues this transaction opens for the advancement of cancer therapy,” said Joseph K. Jachinowski. “Each company is a leader in its respective field, and together we can provide clinicians with more treatment, management and delivery solutions, in less time, and with a greater level of integration than previously possible. No other company addresses the entire spectrum of cancer care or is as committed to open architectures and vendor-neutral connectivity as IMPAC and Elekta are. And no other company can offer the disease management and outcomes analysis initiatives we can deploy which can significantly reduce the cost and effort required to treat cancer patients,” stated Jachinowski.
