Acquired in a huge deal
with Echoserve and Barrington
with Echoserve and Barrington
Sonora Acquisition Update
October 07, 2009
by Barbara Kram, Editor
What do you get when three niche companies combine? A medical equipment service powerhouse.
This week, Medical Imaging Holdings, Inc., formed by Galen Partners, acquired the Sonora Medical Systems business from Misonix, Inc. Sonora joins Barrington Medical Imaging and Echoserve under the new umbrella. The new firm, which may get its brand name as soon as this month, benefited from investment by Galen Partners, a leading health care private equity firm.
Sonora Medical Systems is known for testing equipment and R&D in ultrasound and other technologies.
"What we are talking about is fresh and unique, taking a step back and looking at the market. It's not developing a company that is just going to offer a cheap alternative in field service, equipment or life cycle maintenance. But it's really taking a different and fresh look at the actual needs: What have we learned from service over these many years?" said G. Wayne Moore," founder of Sonora and President, Advanced Development Group and Chief Strategy Officer for the combined company.
"The OEMs still have a huge percentage of the service contract capture rate...but third parties are tackling some of the tougher issues with the newer technologies," he told DOTmed. He said of the investors, "They combine a great MRI field service group with Barrington; they brought in Echoserve which has focused on field service in the mammography and ultrasound space; and what they lacked was an R&D and product development engine, which is what Sonora is. So they have really combined those three companies and it is going to translate into an entirely different and fresh approach to how service is delivered in this country to medical imaging devices."
Not all the financial details of the deals were disclosed, although Misonix issued a press release reporting that all of the assets of its subsidiary, Acoustic Marketing Research, Inc., DBA Sonora Medical Systems, were sold to Medical Imaging Holdings, Inc., for $8 million in cash.
The three entities are expected to maintain their facilities and staffs, including a significant corps of dozens of field service engineers in major U.S. markets, DOTmed News has learned. Two of the three companies--Echoserve and Sonora--are based in Golden, Colorado, with Barrington near Chicago.
Investors Go After the Aftermarket
The merger and acquisition of three modality-focused medical equipment service companies seems aimed at serving two masters--the urgency to cut health care costs and the imperative of keeping equipment in service longer, yet with superior operation.
"In the post-Deficit Reduction Act era and in the face of continued pressure on reimbursement rates, controlling costs is critical for hospitals and diagnostic imaging centers. In addition, general economic conditions and less access to capital have resulted in medical imaging providers holding on to their capital equipment longer -- well beyond the initial warranty periods," explained Jeff Soinski, Chief Executive Officer, Medical Imaging Holdings, Inc. "Consequently, we believe there is a large and growing need for a technology-enabled service organization that can provide high quality, comprehensive imaging solutions to the provider market at a reasonable cost."
The new organization is truly an innovative model combining the focus of small companies with the breadth of large ones. (While Echoserve and Sonora both specialize in ultrasound, Echoserve is oriented toward field service and Sonora develops testing instruments used by biomedical engineers, among other activities.)
"Many of the independent service providers currently serving the market have regional footprints, specialize in a single modality or vendor platform, and have limited technical capabilities. By combining the proprietary technologies and capabilities of Sonora with the comprehensive, nationwide service offering and remote monitoring capability from Barrington Medical and Echoserve, we believe we have created a unique offering to the market and are well-positioned to provide an exceptional value proposition for our customers," Soinski told DOTmed.
What's next for the group? Additional acquisitions to add further competencies, modalities and technologies?
"As we uncover additional opportunities that we believe will add value for our customers and drive further competitive differentiation, we will pursue them, but we are not subject to any set timetable for additional transactions," Soinski said.
That sounds like a "yes."
Read more on DOTmed:
Sonora Medical Systems Acquired by Medical Imaging Holdings, Inc.
https://www.dotmed.com/news/story/10398/
Galen Partners' David Jahns and Echoserve's Christopher Cone Talk About the MIH Merger
https://www.dotmed.com/news/story/10351/
Medical Imaging Holdings, Inc. Acquires Barrington Medical Imaging, LLC and Echoserve, Inc.
https://www.dotmed.com/news/story/10330/
This week, Medical Imaging Holdings, Inc., formed by Galen Partners, acquired the Sonora Medical Systems business from Misonix, Inc. Sonora joins Barrington Medical Imaging and Echoserve under the new umbrella. The new firm, which may get its brand name as soon as this month, benefited from investment by Galen Partners, a leading health care private equity firm.
Sonora Medical Systems is known for testing equipment and R&D in ultrasound and other technologies.
"What we are talking about is fresh and unique, taking a step back and looking at the market. It's not developing a company that is just going to offer a cheap alternative in field service, equipment or life cycle maintenance. But it's really taking a different and fresh look at the actual needs: What have we learned from service over these many years?" said G. Wayne Moore," founder of Sonora and President, Advanced Development Group and Chief Strategy Officer for the combined company.
"The OEMs still have a huge percentage of the service contract capture rate...but third parties are tackling some of the tougher issues with the newer technologies," he told DOTmed. He said of the investors, "They combine a great MRI field service group with Barrington; they brought in Echoserve which has focused on field service in the mammography and ultrasound space; and what they lacked was an R&D and product development engine, which is what Sonora is. So they have really combined those three companies and it is going to translate into an entirely different and fresh approach to how service is delivered in this country to medical imaging devices."
Not all the financial details of the deals were disclosed, although Misonix issued a press release reporting that all of the assets of its subsidiary, Acoustic Marketing Research, Inc., DBA Sonora Medical Systems, were sold to Medical Imaging Holdings, Inc., for $8 million in cash.
The three entities are expected to maintain their facilities and staffs, including a significant corps of dozens of field service engineers in major U.S. markets, DOTmed News has learned. Two of the three companies--Echoserve and Sonora--are based in Golden, Colorado, with Barrington near Chicago.
Investors Go After the Aftermarket
The merger and acquisition of three modality-focused medical equipment service companies seems aimed at serving two masters--the urgency to cut health care costs and the imperative of keeping equipment in service longer, yet with superior operation.
"In the post-Deficit Reduction Act era and in the face of continued pressure on reimbursement rates, controlling costs is critical for hospitals and diagnostic imaging centers. In addition, general economic conditions and less access to capital have resulted in medical imaging providers holding on to their capital equipment longer -- well beyond the initial warranty periods," explained Jeff Soinski, Chief Executive Officer, Medical Imaging Holdings, Inc. "Consequently, we believe there is a large and growing need for a technology-enabled service organization that can provide high quality, comprehensive imaging solutions to the provider market at a reasonable cost."
The new organization is truly an innovative model combining the focus of small companies with the breadth of large ones. (While Echoserve and Sonora both specialize in ultrasound, Echoserve is oriented toward field service and Sonora develops testing instruments used by biomedical engineers, among other activities.)
"Many of the independent service providers currently serving the market have regional footprints, specialize in a single modality or vendor platform, and have limited technical capabilities. By combining the proprietary technologies and capabilities of Sonora with the comprehensive, nationwide service offering and remote monitoring capability from Barrington Medical and Echoserve, we believe we have created a unique offering to the market and are well-positioned to provide an exceptional value proposition for our customers," Soinski told DOTmed.
What's next for the group? Additional acquisitions to add further competencies, modalities and technologies?
"As we uncover additional opportunities that we believe will add value for our customers and drive further competitive differentiation, we will pursue them, but we are not subject to any set timetable for additional transactions," Soinski said.
That sounds like a "yes."
Read more on DOTmed:
Sonora Medical Systems Acquired by Medical Imaging Holdings, Inc.
https://www.dotmed.com/news/story/10398/
Galen Partners' David Jahns and Echoserve's Christopher Cone Talk About the MIH Merger
https://www.dotmed.com/news/story/10351/
Medical Imaging Holdings, Inc. Acquires Barrington Medical Imaging, LLC and Echoserve, Inc.
https://www.dotmed.com/news/story/10330/