Planar to boost medical portfolio with acquisition

Planar Systems is to acquire Dome Imaging Systems.

Planar Systems is to acquire Dome Imaging Systems.

Dome's display systems for diagnostic imaging, the leading products in the fast-growing segment of digital medical imaging, will augment Planar's line of medical-grade display and workstation systems and significantly expand the company's reach in the healthcare equipment market.

Expected to close in mid-April, the transaction is expected to be immediately accretive to Planar's earnings per share.

"Planar's long-standing commitment to pursue growth opportunities in the medical market is further demonstrated by the acquisition of Dome's superb products and team", said Balaji Krishnamurthy, president and CEO of Planar.

"Building on our worldwide infrastructure and expertise in display technologies, this acquisition will benefit Planar shareholders and the current and prospective customers of both companies".

Privately held since its founding in 1989, Dome has been a leading innovator of high-performance display systems for healthcare and other image-intensive applications.

The transaction unites two market leaders with complementary product lines and a combined 35-year presence serving the premier medical equipment manufacturers and healthcare institutions worldwide.

"With product development leadership and continuous dedication to customer satisfaction, Dome has led the creation and implementation of medical imaging display technology", said G Richard Fryling, president and CEO of Dome.

"As market forces now combine to generate accelerating growth, the expansion of capability in scope and scale created by joining with Planar will leverage Dome's strengths to a broader market".

The acquisition is valued at $61 million, which is approximately 2.1 times Dome's 2001 revenues.

Planar will pay cash for all of Dome's capital stock, and will assume all outstanding Dome stock options.

Planar will finance the transaction with a new $40 million senior credit facility and cash-on-hand.

Amounts to be recorded for in-process R and D, goodwill and other identifiable intangibles, along with updated guidance for Planar's revenue and earnings estimates, are expected to be determined and disclosed after the transaction closes.

The deal will be accounted for as a purchase transaction.

The transaction has been approved by the boards of directors of both companies, and is subject to the approval of the shareholders of Dome, regulatory review and other customary closing conditions.

The market for digital medical imaging systems includes large diagnostic equipment such as CT scanners and MRI systems, computer-aided diagnostic tools, and picture archive and communication systems (PACS).

The market segment for flat-panel monitors and controller boards used in digital medical imaging is estimated to be $130 million in 2002 and upwards of $280 million in 2003, worldwide.

"The diagnostic medical imaging monitor market is finally starting to expand rapidly as PACS networks proliferate throughout the medical infrastructure", said David E Mentley of iSuppli-Stanford Resources, a display industry research firm.

"While this application has been one of the last strongholds for the monochrome CRT, these specialised CRT monitors are bulky, expensive, generate excessive heat and have short operating lifetimes.

High-resolution LCD monitors have great features that will solve all of these problems and will help radiologists and patients alike".

Dome has achieved the leading share in the markets it serves with high-performance flat-panel monitors, display controllers used for digital imaging in both flat-panel and CRT displays, image calibration devices and image-enabling software.

In 2001, Dome introduced the world's first 5Mpixel flat-panel monitor for medical imaging applications.

Dome's products are part of a solution which eliminates the light boxes, chemical processing and logistics necessary with film-based images, provide all the brightness and resolution radiologists need and enable diagnoses from remote locations.

Planar's line of medical products is led by the new Invitium medical-grade workstation, designed from the ground up to enable networked computing at the point of care; and the Vital Screen family of medically certified flat-panel monitors, available in a wide variety of size and configuration options.

When combined with Dome's products, the new line will span the range of the imaging needs of the world's leading medical equipment manufacturers and healthcare institutions.

"Medical equipment customers seek committed technology suppliers that demonstrate a dedication to providing superior solutions to the healthcare market", said Krishnamurthy.

"With the great depth of knowledge and experience that the Dome team brings, and the increased breadth of the medical product line, Planar now offers the most complete solution set to the companies' combined customer base and market prospects".

The move toward electronic images and record keeping in medical institutions is part of the expanding field of healthcare informatics, which Planar has targeted for significant growth in the next decade.

Based on studies published by the Gartner Group, SRI and other industry experts, the global market for clinical computing systems and displays is estimated to have been about $4 billion worldwide last year and growing at about 23% annually.

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