(Bloomberg) -- Intelerad Medical Systems Inc. has agreed to acquire Ambra Health, a cloud-based medical imaging manager, in a deal that values the combined entity at $1.7 billion, according to a statement provided to Bloomberg. 

Intelerad, a medical imaging software company backed by European buyout firm Hg, will pay more than $250 million for Ambra Health, according to people familiar with the deal who asked not to be identified because the information was private. 

Intelerad’s platform is used by radiologists primarily outside of hospitals to access and analyze images like CT scans, X-rays and MRIs.

With New York-based Ambra Health, Intelerad gains a footprint within large U.S. health systems and hospitals that are increasingly looking to adopt technology to more easily read and share patient scans. The shift has fueled a $4.5 billion market for global hospital imaging IT, according to estimates by Signify Research.

Modern Tools

“There’s a huge market opportunity within hospitals where many radiologists are relying on legacy solutions and they’re not particularly happy,” Hg Director Hector Guinness, a board member at Intelerad, said in an interview. “The combined business has the opportunity to bring modern software tools that remove the need for some of the painful things that radiologists go through, like when they have to load images onto a CD.”

Combining the platforms will give doctors, patients and researchers the ability to read, store and share diagnostic imaging over the cloud, according to the statement. 

Hg focuses on software and services and has completed more than $1 billion of health-care deals in the past two months. The deal is Intelerad’s fourth acquisition of 2021. 

Hg’s Guinness said he met Ambra Health Chief Executive Officer Morris Panner at a health-care IT conference in 2019. The two kept in touch and in 2020 Hg bought a majority stake in Intelerad, which has headquarters in Montreal and Raleigh, North Carolina.

Revenue Jump

At the time, Intelerad had an enterprise value of C$650 million ($523 million) to C$700 million, the people said. Intelerad’s revenue has increased more than 65% over the past 12 months, according to a company representative. 

As part of the Ambra Health deal, Panner will become president of Intelerad, reporting to CEO Mike Lipps. 

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