In its effort to expand in the still untapped IMEA (India, Middle-East and Africa) region, Illinois-based healthcare information software solutions provider – Merge Healthcare Inc. (MRGE) formed an alliance with Dubai-based healthcare provider ICT Health.
With this agreement, both the corporations aim to provide high quality, cost-effective imaging solutions to hospitals and healthcare clinics situated in the IMEA region. However, financial terms of the deal remained undisclosed.
The news announcement has bolstered investor confidence at Merge Healthcare, as is evident from the company's share price, which increased 4.5% to eventually close at $4.38 yesterday.
Since the IMEA region is diverse and vast with large parts of it still being economically underdeveloped, managing patient health and providing real-time care is a big challenge. Basically, technology-driven healthcare is still in a nascent stage in this region, particularly for people who dwell in remote and underserved communities.
Through this collaboration, the two participating organizations plan to bring forward innovative, integrated cloud deployable imaging solutions in the healthcare market that will transform the entire process in which images are currently viewed, shared and archived.
This partnership will deliver an extensive end-to-end solution portfolio connecting all the clinical and administrative systems, thereby offering enhanced efficiency and better quality patient outcomes.
The partnership will also enable healthcare providers to offer speedy patient care at a reduced rate using cloud deployable solutions, thus benefiting overall healthcare cost. It is noteworthy to mention that this partnership is among the most significant strategic healthcare initiatives that have been undertaken in the IMEA region, in recent years.
Management at Merge Healthcare believes that teaming up with ICT Health, which has already established itself as a premier healthcare solutions provider in the IMEA regions, will be profitable for the company, going forward. The company expects the accretion from the deal to be reflected in its 2015 financial results.
Our Take
We believe this alliance with ICT Health will earn higher revenues for Merge Healthcare's Software and other segment in the near term. Notably, the segment had accounted for a significant 34% of total sales in the last reported third-quarter 2014.
Currently, Merge Healthcare retains a Zacks Rank #3 (Hold). Some better-ranked medical stocks are Edwards Lifesciences Corp. (EW), Allscripts Healthcare Solutions, Inc. (MDRX) and Medidata Solutions, Inc. (MDSO). All three stocks hold a Zacks Rank #2 (Buy).
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