Fujifilm Pips Samsung To Acquisition Of Sonosite
Date: 19 December 2011

Fujifilms’s acquisition today of Sonosite Inc,  the Seattle based compact ultrasound provider for $1 billion, signals an increasingly competitive battle for global ultrasound market share. The deal means that another major force has entered the ultrasound arena, following the entry of Samsung Electronics in mid-2011, and may signal Fujifilm’s intent to move deeper into medical imaging.  

This move is the latest in a flurry of mergers and acquisitions in the global ultrasound market. Hitachi’s merger with Aloka Co. Ltd in late 2010, producing the third largest ultrasound supplier globally, was followed by Samsung’s entry with the acquisition of Korean supplier Medison Co. Ltd, in early 2011. Many in the industry saw Samsung as frontrunner for the acquisition of Sonsosite, following plans outlined by Samsung to generate almost $10 billion of medical device revenue by 2020, driven by an aggressive M&A strategy.

The timing of Fujifilm’s move is also telling. Despite challenging conditions in some mature markets, such as North America and Europe, strong growth in the last five years in emerging regions points to a bright market outlook. For instance, according to InMedica, the Asia Pacific region, driven by China, India and South East Asia, is projected to become the largest market for ultrasound equipment by 2014. Fujifilm’s proven track record and extensive operations network here could drive a strong future performance for Sonosite.

Medical imaging technology continues to evolve, with wireless, cellular and display technologies becoming increasingly important. Fujifilm is fully aware of this, having undertaken a significant transition in its well established X-ray business unit, from a traditional film-based analogue company, to a fully-fledged digital X-ray and Healthcare IT provider. There is also synergy with Fujifilm’s existing sales organization, by leveraging existing Fujifilm X-ray purchasing contracts in hospital deals.    

Success in the wider medical imaging industry is dependent on three key factors; development of innovative new technology, demonstration of clinical effectiveness, and provision of training and service support. Fujifilm has already demonstrated capability to adapt to these challenges in X-ray and Healthcare IT, where it has a strong global presence. Keeping Sonosite as a wholly-owned subsidiary and retaining the leadership team is a smart move. Sonosite have pioneered and established the compact ultrasound market, particularly in new clinical applications. Clever re-invention and application of existing ultrasound technology, paired with a widespread physician education program, has led to strong growth in the last five years. Upsetting the leadership balance and integrating the business could have been a costly mistake, with the market for hand-carried ultrasound systems forecast to reach $1.1 billion by 2015 (InMedica, 2011).    

Fujifilm’s acquisition may also signal intent to become a multi-modality imaging provider, competing in other major markets such as Magnetic Resonance Imaging (MRI) and Computed Tomography (CT). While these are well consolidated markets, the reward and benefits for such a bold move are clear. In the last 8 years, the established multi-modality giants, GE Healthcare, Philips Healthcare and Siemens Healthcare have all posted 50-60% revenue gains, despite recent economic turmoil. Whether the next 8 years remain as profitable for these giants, will partly depend on how they respond to this new challenger.

Stephen Holloway is lead analyst for Medical Imaging research at InMedica, and author of InMedica’s global reports on ultrasound and X-ray equipment. For more details, please visit www.in-medica.com.  

Editors Note :

For more information please contact: Theo Ahadome – Press Manager, InMedica T: +44 (0) 1933 40 22 55 theo.ahadome@in-medica.com

About InMedica :

InMedica is the brand name of IMS Research’s medical research group. We publish high quality, in-depth market research on Clinical Care Devices, Consumer Medical Devices, Medical Imaging, Healthcare IT and Telehealth. We offer our clients complete coverage of the global market, with dedicated reports on high growth regions, such as China, Eastern Europe and the Middle East. To find out more, contact InMedica: enquiries@in-medica.com; T: +44 (0) 1933 402255; www.in-medica.com