Kodak To Acquire Dental Digital Systems Vendor

Plans call for Rochester, N.Y.-based Kodak to buy all outstanding shares of PracticeWorks for about $500 million in cash. As part of the deal, Kodak said it also will acquire Paris-based Trophy Radiologie, a developer and manufacturer of dental digital radiography equipment that PracticeWorks acquired last December.

Kodak said the PracticeWorks deal is expected to add about $215 million to its revenue in the first full year after the acquisition. Kodak, already a major player in dental X-ray film, said it expects the acquisition to lift it into a leading position in the DPMS and dental digital radiographic market.

"We will be able to offer choices within a full spectrum of dental imaging products and services, from traditional film to digital radiography and photography," said Dan Kerpelman, president of Kodak's Health Imaging Group and senior vice president at Eastman Kodak, in a statement. "We'll also be able to provide innovative information technology to digitally integrate dental images with patient health records. This info-imaging capability ultimately will enable dental professionals to manage patient care from the front office all the way through treatment with high-quality Kodak images at key points in the process," he said.

DPMS enables dentists to manage a variety of dental front-office functions, such as scheduling, billing and record keeping, and the technology is evolving into a broader patient management tool that extends to treatment planning and delivery, according to Kodak. Kodak estimates that worldwide sales of DPMS exceed $200 million annually and will grow 8 percent to 10 percent per year.

The company also projects global dental digital radiography sales to total $100 million to $120 million annually but it said the penetration rate of that technology remains low in the United States and other large markets. "The market opportunity is significant," Kerpelman said in the statement.

Along with DPMS software, digital radiography can integrate images and information in ways that help dentists save time and money and increase productivity, according to Kodak. Image quality of such systems also has improved dramatically, and the growing trend among insurers to handle claim submissions electronically with digital images and information attached is prompting many dental practices to adopt digital systems, the company said.

Kodak said it expects digital radiography adoption to reach 30 percent in the United States by 2007, with a compound annual growth rate of about 20 percent, as dentists become more familiar with the technology.