Philips buys US PACS firm Stentor

Royal Philips Electronics is to acquire Stentor, a US firm specialising in picture archiving and communication systems (PACS) for radiology images in a deal that will make Philips the world’s second largest PACS provider.

Philips, which is contracted to provide PACS systems to NHS hospitals in London as part of the NHS national programme for IT, will pay £169 million for Stentor Inc.

The acquisition should strengthen Philips’ presence in the high-growth healthcare information technology market. Stentor will be incorporated into the Healthcare IT business of Philips’ Medical Systems division.

Stentor and Philips together had a global market share of about 18 per cent in 2004, behind General Electric but double that of Siemens and Agfa Gevaert.

Stentor, which has received a number of US industry accolades for its PACS system is projecting rapid growth over the coming year based on its "pay-per-study" business model, in which customers pay a fee to view, distribute and store medical images rather than purchase a PACS system.

"Stentor is an exceptional company with very talented people and unique technology that will significantly strengthen our position in healthcare IT," said Jouko Karvinen, President and CEO of Philips Medical Systems.

He added that Philips is strongly committed to the support of its current customer base and "will work with these users to let them benefit from the Stentor advantages".

Oran Muduroglu, President of Stentor, said: "We can now extend Stentor PACS outside of the radiology department and into other areas of the hospital where conditions like cancer and heart disease are treated."

Stentor’s PACS technology is said to be able to transmit medical images — with full resolution, 14 to 16 times faster than any competitor, and with lower hardware costs for hospitals.

Philips says the Stentor deal will enable it to offer hospitals and other customers a complete package of state-of-the-art medical scanners along with Stentor’s PACS products to handle the large volumes of imaging data generated by medical scanners.

Combined, Philips and Stentor will have PACS installed at over 1,600 healthcare institutions worldwide, and will be second largest in the global PACS market.