Siemens shells out $2.1 billion for SMS; Readers’ Choice awards; World Tour: Panama

They won’t have to change the towels
Siemens shells out $2.1 billion for Shared Medical
There’s been a lot of bad blood flowing between healthcare IS firms Eclipsys Corp. (Delray Beach, Fla.) and Shared Medical Systems Corp. (SMS of Malvern, Pa.) because of smaller Eclipsys’ attempt to take over larger SMS. That’s over now. The intervention of bigger, outside firms has put this turgid IS melodrama to rest.

Siemens Medical Engineering Group wrote what should be the final line to the story by sealing a deal in early May to acquire SMS — a $2.1 billion stock deal. Siemens will pay $73 per share cash tender offer for the outstanding shares of SMS. SMS reported $1.2 billion in sales last year and employs 7,600 people.
Siemens’ acquisition was revealed only weeks after SMS announced in March that it was exploring strategic alternatives, an announcement made in the midst of a hostile takeover attempt by Eclipsys. That attempt, and the lawsuit Eclipsys filed against SMS directors for blocking it, ended when Eclipsys agreed to be acquired for $1.45 billion by Neoforma.com (Santa Clara, Calif.) on March 30 — a doomed agreement, for new suitor Neoforma.com is now ditching Eclipsys. (See below.)

SMS President and CEO Marvin S. Cadwell said the Eclipsys situation was a distraction during his company’s search for an acquisition partner, but Cadwell emphasized that the hostile takeover attempt did not send SMS scurrying for a white knight, as he feels some industry watchers have surmised.

“While the industry believes that the expression of interest we received by Eclipsys stimulated this, I can assure you it did not,” Cadwell said. “[The attempted takeover by Eclipsys] probably did serve to accelerate the activities that were already under way.”

Erich Reinhardt, president of Siemens’ Medical Engineering Group, based in Erlangen, Germany, declined to comment on the Eclipsys situation, but said Siemens has been focused on developing its IT offerings for several years, as far back as 1990 when the company created SiemensNixdorf. Historically, Siemens preferred an internal growth strategy, but that seemed too sluggish, so Siemens is now in the acquisition mode.

SMS will become a Siemens business unit and will remain based in Malvern. An integration team comprised of representatives from both Siemens and SMS will manage the process, and both companies said current product overlap is minimal.

When asked what Siemens will call the new organization, Reinhardt joked, “That one’s easy — it’s SMS,” a reference to the initials shared by Siemens Medical Systems and Shared Medical Systems. In reality, Siemens will not announce if it will keep the Shared Medical Systems name until the deal is completed.

The transaction has been approved by SMS board members and is expected to close before June 30 but a final disposition may come as early as the first week of June, according to Cadwell.


Neoforma/Eclipsys deal hits skids

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Baan’s on the run
The stock of Dutch customer relationship management (CRM) software firm Baan Company spiraled out of control this Spring, leading to rumors that the company is for sale.

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Astea wins deal for Lunar rovers
Bone densitometry equipment developer Lunar Corp. (Madison, Wis.) is installing ServiceAlliance Customer Relationship Management software from Astea International Inc. (Horsham, Pa.) to manage aftermarket product service and support worldwide.

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d02a.jpg (7560 bytes)Knowledge for Sale
Our slimy scroller has seen them all and isn’t overly impressed with doctor dot-coms. But one recent idea earned the Worm-mark of approval.

The Good News: e-SKOLAR was developed and spun off by the braniacs at Stanford University. It’s a Web-based “Knowledge Service Provider.” Translation: It’s a beefed-up, medical-specific search engine that Stanford developed to give its physicians access to myriad medical journals and other medical resources. Now it’s available to the common surfer, with a catch.

The Bad News: e-SKOLAR is a subscriber-only site with an annual fee of $240. While our Net-enabled penny pincher might not have that kind of mulch, anyone fed up with duplicitous searches of countless Web sites for medical information may find e-SKOLAR worth the scratch.


d02b.jpg (8559 bytes)One step ahead of technology
These are boom times for marathoning, but some races are now so large that it is nearly impossible to track the thousands of runners on the course. To address this issue, organizers of the larger races began issuing small computer chips to entrants a few years back. The device is tied into the racers’ shoelaces.

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d02c.jpg (14310 bytes)Consistency marks 24×7 awards for 2000
The HealthTech crowd moved closer, trying to sneak a peak at the names etched into heavy glass trophies that were displayed, yet draped to thwart curious eyes. Frontrunners attempted to act nonchalant, but their tension was exposed by the way they fidgeted with brochures or rocked on the balls of their feet, trying to make casual conversation while shooting glances towards 24×7 editor Bob Larkin who, clad in tuxedo, prepared to announce the winners of this year’s 24×7 awards.

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photoIndustry vets at HealthTech predict market growth
The market for medical device service in the U.S. is estimated at somewhere between $12 and $20 billion, according to two industry veterans who spoke at HealthTech 2000 in Dallas, Texas.

24×7 Publisher Jack Spears cited the larger figure in his presentation, while Ray Dalton, president and CEO of OneSource Services, cited the lower number. Both agreed the market is expanding and changing rapidly, providing excellent opportunities.

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When Karl Storz attacks
Endoscope maker using underground “education”
The “public awareness” campaign being mounted by Karl Storz Endoscopy America against independent endoscopy servicers was escalated, and it has gone incognito. The company hired a professional public relations/ communications firm to front and distribute a brochure that claims alternative endoscopy service and remanufacturing providers are excessively risky.

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photoSurvivalink aims at arresting golfers
“If I get a hole in one, I’ll just die!”
Ever heard that phrase while out on the links? Well, the folks at Survivalink (Minneapolis) must have heard it one too many times because they recently signed a deal with Softspikes Inc. to sell the FirstSave automated external defibrillator (AED) to golf clubs and resorts. Softspikes is a manufacturer of plastic golf cleats. The Survivalink products will be distributed through Softspikes’ Solutions Group, a specialty products division.

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U.S. Counseling Snags Wolverines
The University of Michigan Health System (UMHS) signed a five-year contract with U.S. Counseling Services Inc. for its Lifecycle Managed Maintenance Program.

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d02g.jpg (5059 bytes)
PANAMA
U.S.-based medical equipment dealers and servicers are taking advantage of the “global village” and tapping into the rising Central American market. Panama may be the most technologically advanced and U.S.-friendly nation in the region, making it a prime target for dealers and service providers.

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