Olympus snaps up Image Stream Medical for $87M
- Center Valley, PA-based Olympus Corporation of America (OCA) has inked a definitive agreement to acquire Image Stream Medical for up to $87 million.
- Image Stream, based in Littleton, MA, provides video equipment and system integration solutions for operating rooms. The company reported $31 million in sales in 2016.
- OCA, the country’s leading provider of medical endoscopes, said the acquisition will result in an integrated workflow, improved patient outcomes and lower costs.
The deal is the latest in a spate of medical device industry M&A activity aimed at shoring up existing product lines and diversifying into new ones. Recent transactions include a $6 billion buyout of Medtronic’s medical supply business by Cardinal Health and Abbott’s $25 billion acquisition of St. Jude Medical.
OCA could use some good news. The company was caught in a media storm in late 2015 and early 2016 after one of its reusable duodenoscopes was linked to superbug outbreaks at hospitals in the U.S., France and the Netherlands. The company initiated a recall of the TJF-Q180V model duodenoscope in February 2016.
An earlier U.S. Senate investigation found the devices were associated with 24 outbreaks worldwide. It was later revealed that officials at OCA’s parent company, Japan- based Olympus Corp., sent internal emails to U.S. executives urging them not to warn hospitals of the potential risks.
The device maker also paid the U.S. government $646 million to settle kickback and bribery charges involving its operations in New Jersey and Latin America. According to federal prosecutors, OCA paid providers to buy its medical scopes in violation of the U.S. Anti-Kickback Statute and the False Claims Act.
OCA officials said they don’t foresee any interruption in services for customers of either company. “We are thrilled to soon create better platforms to provide patients with increased access to more advanced procedures, such as minimally invasive surgeries,” Todd Usen, president of OCA’s Medical Systems Group, said in a statement.
The deal is expected to close in early June, pending regulatory approvals. Once completed, Image Stream will operate as a wholly owned subsidiary of OCA.