CardioNet buys cardiac monitoring provider for $5.8 million

By: Brian Dolan | Feb 13, 2012        

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CardioNet patient monitorMobile cardiac outpatient telemetry services provider CardioNet announced last week the acquisition of ECG Scanning & Medical Services, a cardiac monitoring provider, for $5.8 million in cash. The deal price could include an additional $600,000 cash earn out if certain performance milestones are met.

“We are excited to join forces with ECG Scanning. ECG Scanning is a respected cardiac monitoring provider that affords CardioNet access to established relationships with healthcare providers and payors in the mid-west,” stated Joseph Capper, President and Chief Executive Officer of CardioNet. ”This acquisition demonstrates our commitment to augment the growth of our core business through strategic transactions. The combined strength of the two companies further cements CardioNet’s position as the leading provider of wireless cardiac monitoring services.”

The company’s last acquisition was announced in November 2010: At that time CardioNet announced plans to acquire Biotel in a definitive merger agreement for $11 million in cash. That deal was a long time coming: CardioNet had previously announced plans to acquire Biotel but cancelled the plans three days after the CMS contractor that reimbursed for CardioNet’s services cut the reimbursement rate by almost one third. The Biotel acquisition brought its Braemar subsidiary’s wireless event monitor under the CardioNet umbrella and also set CardioNet up to enter the clinical services market through Biotel’s Agility Centralized Research Services. Those include event, Holter and twelve-lead ECG monitoring services for medical device, pharmaceutical, contract research, and academic research organizations.

When it announced its Biotel acquisition, CardioNet also disclosed plans to partner with another wireless-enabled health company, MedApps, to form a “strategic alliance” to “deploy new and innovative wireless monitoring solutions that benefit patients in a cost-effective, meaningful manner.” In 2009 CardioNet pointed to chronic condition management as a potential market opportunity, but beyond the planned MedApps partnership has not moved into the space.

Press release announcing the ECG Scanning & Medical Services acquisition below:

PRESS RELEASE: CONSHOHOCKEN, Pa., Feb 10, 2012 — CardioNet, Inc., a leading wireless medical technology company with a current focus on the diagnosis and monitoring of cardiac arrhythmias, today announced the acquisition of ECG Scanning & Medical Services, Inc. CardioNet acquired all of the outstanding shares of ECG Scanning for aggregate consideration of $5.8 million in cash at closing and up to an additional $0.6 million in cash upon the achievement of certain performance targets.

Joseph Capper, President and Chief Executive Officer of CardioNet, commented: “We are excited to join forces with ECG Scanning. ECG Scanning is a respected cardiac monitoring provider that affords CardioNet access to established relationships with healthcare providers and payors in the mid-west. This acquisition demonstrates our commitment to augment the growth of our core business through strategic transactions. The combined strength of the two companies further cements CardioNet’s position as the leading provider of wireless cardiac monitoring services.”

About CardioNet

CardioNet is a leading provider of ambulatory, continuous, real-time outpatient management solutions for monitoring relevant and timely clinical information regarding an individual’s health. CardioNet’s initial efforts are focused on the diagnosis and monitoring of cardiac arrhythmias, or heart rhythm disorders, with a solution that it markets as Mobile Cardiac Outpatient Telemetry(TM) (MCOT(TM)). More information can be found at http://www.cardionet.com