GE to Partly Acquire Rayence Assets - Analyst Blog
In a concerted effort to augment presence in the healthcare
industry, GE Healthcare, the healthcare operating unit of
General Electric Company
), recently inked a definitive agreement to acquire some of the
Mammography assets of Rayence Co Ltd for an undisclosed amount.
Post-acquisition, the acquired assets will form an integral part
of the Detection & Guidance Solutions business unit of GE
Headquartered in South Korea, Rayence manufactures and supplies FPD (Flat Panel Detector) for digital X-Ray imaging system across the globe. It is a subsidiary of Vatech Co Ltd, a premier Korean X-Ray manufacturer. In association with its parent company, Rayence offers a diversified portfolio of radiographic sensors that are the most critical components of diagnostic X-ray systems.
With this acquisition, GE Healthcare has strengthened its position in the mammography segment, the market for which is currently estimated to be around $200 million. Moving forward, the company expects to invest significantly in local engineering and production facilities to make the products available to new users and rural communities around the world for screening programs for breast cancer diagnosis. GE Healthcare specifically intends to merge its core imaging capabilities with Rayence's mammography assets, which are tailor-made for specific geographical regions, to further bring down the costs of these products.
The acquisition is also in sync with the corporate growth strategy of "In Korea, For the World" of GE Korea, wherein it leverages low-cost high-quality technologically advanced products for the overall improvement of the global community. On the other hand, by pairing with GE Healthcare, Rayence anticipates to achieve economies of scale and utilize its sales channel for garnering further business of CMOS (Complementary metal-oxide-semiconductor) detectors that allows a high density of logic functions on an integrated chip (IC). In addition, Rayence aims to invest the money generated from the partial divesture of assets for R&D efforts of core parts for x-ray devices. The transaction, therefore, is a win-win deal for both the participating companies.
Headquartered in the U.K., GE Healthcare offers a broad portfolio of products and services that redefine patient care. The company has a proven expertise in diverse healthcare segments such as medical imaging and information technologies, medical diagnostics, patient monitoring systems, drug discovery, biopharmaceutical manufacturing technologies, performance improvement and performance solutions. It accounted for 12.3% of the total revenue of General Electric in first quarter 2013.
Serving over 100 million customers worldwide, General Electric is one of the largest and the most diversified technology and financial services corporations in the world, with products and services ranging from aircraft engines, power generation, water processing, and security technology to medical imaging, business and consumer financing, media content and industrial products. Its segments include Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation, Home & Business Solutions, and GE Capital.
General Electric currently has a Zacks Rank #3 (Hold). Other companies in the industry worth mentioning include ITT Corporation ( ITT ), Compass Diversified Holdings ( CODI ) and Honeywell International Inc. ( HON ), each carrying a Zacks Rank #2 (Buy).
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