FORT LAUDERDALE, FLA. (05/01/2000) - Siemens AG plans to give itself a vitamin shot to increase its IT business in the health-care industry by acquiring U.S.-based Shared Medical Systems Corp. (SMS) for about US$2.1 billion.
Siemens' Medical Engineering Group plans to pay $73 in cash for every SMS share within the next 10 days. Siemens hopes the acquisition will help it improve its operations in the U.S. and increase its services business. Services currently account for 25 percent of Siemens' total sales, and this acquisition is expected to boost that to 50 percent of total sales, the company said today.
SMS, based in Malvern, Pennsylvania and founded in 1969, had revenue of about $1.2 billion in 1999, compared with $1.1 billion in 1998. Net income for 1999 was $76 million, compared with $70 million in 1998. The company provides IT systems and services, such as application hosting and systems management, to health-care companies.
The Siemens Medical Engineering Group has about 19,000 employees worldwide and provides products and services to the health-care industry. It had sales of $4.3 billion in fiscal 1999. Its U.S. affiliate, Siemens Medical Systems Inc. in Iselin, New Jersey, has about 4,500 employees.
The deal needs approval from shareholders and regulatory agencies.
SMS' stock was trading at $41.44 in mid-morning trading, unchanged from Friday's close.
Siemens, in Munich and Berlin, can be reached at http://www.siemens.com/.