MONTREAL - CAE Healthcare is looking to further tap into the growing demand for medical simulation training by making its first acquisitions with the purchase of two ultrasound training companies.
The subsidiary of flight training and technology firm CAE Inc. (TSX:CAE) said Thursday that it will buy both ICCU Imaging and Vimedix for an undisclosed price.
The small Montreal companies only have a total of 10 full-time employees and 20 instructors but they give CAE an entry into a market that is expected to undergo strong growth in the coming years.
ICCU develops educational multimedia designed to help medical care professionals perform bedside ultrasounds, while Vimedix specializes in echographic simulations, and is marketing a virtual reality echocardiography simulator.
CAE said handheld and portable units are experiencing a growth in popularity because the technology allows more healthcare professionals to perform diagnostic procedures and evaluations. In the past, many of those practices could only be completed by medical imaging specialists.
"Just the day-to-day use of this device is what’s being called the stethoscope of the future," CAE Healthcare president Guillaume Herve said in an interview.
The devices allow doctors, nurses and other users to quickly diagnose and treat patients in their beds and without invasive procedures. They can be used, for example, to find veins in patients, determine how well organs are functioning and whether a patient is suffering a heart attack.
While manufacturers such as General Electric and Siemens make the small devices, CAE plans to leverage its experience with simulation and training.
"The problem in medical simulation is that a lot of companies are bringing technology out but they’re not providing the training and the curriculum," Herve said.
He said the combination of the companies will enhance their offering and further CAE’s quest to tap into the healthcare training market that is expected to be worth $1.5 billion by 2012.
"For CAE to launch in a new core market like healthcare we’re obviously going to want to be a major player so our aim is to grow a major business within CAE," he said.
There are an estimated 300,000 potential traditional customers in North America for the devices and simulation training CAE will provide, including radiologists and cardiologists.
But the real growth is expected to come from emergency specialists and nurses, private clinics and even the military that could total one million people by 2015.
"That’s where the explosion is going to happen," Herve said.
Desjardins Securities analyst Benoit Poirier said the acquisitions are beneficial for CAE.
"This announcement is a long-term positive given it will allow CAE to diversify away from its core aerospace and defence operations at a minimal cost," he wrote in a report.
"Over the short term, however, we do not expect the acquisitions to have a material impact on the company’s results."
The acquisitions follow a November agreement with Titan Medical for the development of a clinical-grade robotic surgery platform. It previously signed partnerships with the University of Montreal’s medical school, Toronto’s Michener Institute and Winnipeg’s Regional Health Authority.
The founders of the two companies being sold to CAE will remain with the companies.
Montreal cardiologist Dr. Robert Amyot said he’s very enthusiastic about joining the CAE Healthcare team.
"By combining our healthcare educational experience with CAE’s 60 years of world-leading experience in simulation-based training, I am convinced we will develop together innovative life-saving and life-enhancing tools."
CAE shares closed up 19 cents to $8.99 in Thursday trading on the Toronto Stock Exchange.
