Carestream builds with acquisition

Will Astor//September 10, 2010//

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Carestream Health Inc.’s acquisition this week of a Long Island-based medical imaging firm will give it a new foothold in emerging markets, Carestream Digital Medical Solutions president Diana Nole predicted.

Carestream announced the acquisition this week of Quantum Medical Imaging LLC, with undisclosed terms. Quantum Medical makes digital and conventional X-ray medical imaging equipment. Its operations, management and staff of roughly 70 employees will remain on Long Island, operating as a unit of Carestream’s Digital Medical Solutions division, Nole said.

The Long Island company’s line of generally smaller and less costly equipment is more suited for group and individual practices and clinics. Carestream’s digital equipment is better suited to larger health care providers such as hospitals and health systems, she said.

Though Caresteam already sells to larger hospitals in Asian and other emerging world markets, it has not previously had products affordable for smaller clinics, Nole said. And while Quantum Medical’s products are well suited to smaller, emerging-market medical providers, the Long Island firm’s international sales efforts have been minimal.

The marriage of the two medical imaging equipment companies will help Carestream grow its share of the clinic and practice group market while giving the smaller Quantum Medical the benefit of Carestream’s extensive U.S. and worldwide sales and marketing organizations, Nole said.

Quantum president and CEO Scott Matovich will report to her, Nole said.

"By joining forces with a global health care solutions provider of Carestream Health’s caliber, we are further advancing and accelerating our growth trajectory," Matovich said in a statement.

For the time being, Carestream will continue to market Quantum Medical equipment under that brand name in U.S. markets, but it will consider a switch to the Carestream brand in the future, Nole said. A switch to Carestream branding in European and other non-U.S. regions, where the Quantum Medical brand is not as well known, likely would come sooner, she added.

Eastman Kodak Co. spun off Carestream-its former X-ray film and health imaging unit-in 2007, selling it to the Toronto-based private-equity firm Onex Corp in a $2.3 billion deal. In 2006, Carestream, which does not now disclose revenue, had revenue of $2.5 billion. It employs 7,300 people worldwide. Its 1,200 local workers account for roughly half of Carestream’s U.S. staff.