Merge adds MRI CAD with $22M Confirma acquisition

Health IT developer Merge Healthcare has entered a definitive agreement to acquire MRI computer-aided detection (CAD) application developer Confirma in an all-stock transaction.

The acquisition will bring an MRI CAD product to the portfolio of the Milwaukee-based Merge.

"CAD technology is still at an early adoption phase in the market for most indications, but it has significant opportunity as a tool for reducing imaging costs," said Justin Dearborn, Merge's CEO.

The total value of the all-stock transaction is estimated to be $22 million, using a ten-day volume weighted average of Merge's common stock price as of the close of market on Aug. 6. Based on the amount of stock offered, it is estimated that investors in the Seattle-based Confirma will own approximately 8.5 percent of Merge, post-acquisition.

Confirma has developed CAD algorithms, intellectual property and validation required of the clinical tools, the companies said. Its CADstream product has more than 1,200 systems implemented for breast and prostate MRI. 

Merge expects the transaction to be completed this September.