IBM said it will acquire Merge Healthcare for $1 billion in a move that will enable its Watson cognitive computing system the ability to see medical images.
Merge's platform is used to handle and process medical images at more than 7,500 healthcare sites. The company also has clinical systems.
For Big Blue, the acquisition highlights how healthcare is the most important industry for commercializing Watson. While Watson has applications across multiple industries, healthcare provides the most immediate pop.
IBM is hoping to take Watson's image analytics and combine them with Merge's medical management platform. The company could combine Watson's cloud applications to give electronic health records more intelligence.
Merge's technology is used in radiology, cardiology, orthopedics, eye care and other healthcare specialties.
With images added to Watson, the system should be able to see more patterns and help radiologists interpret results. IBM wants to cross reference medical images with lab results, genetic testing and other data.
Under the terms of the deal, IBM will pay Merge $7.13 a share in a deal valued at $1 billion. The purchase is expected to close later this year. IBM has previously acquired Phytel and Explorys and wrapped them in the Watson Health unit, which launched in April.