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Global Business Machines Corp. To Purchase Merge Healthcare Inc. For $1

IBM is bolstering its health-care providers enterprise, centered round a brand new enterprise unit referred to as Watson Health Cloud. The deal is expected to close by the end of this year.

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Merge’s technology is used by 7,500 hospitals and doctor’s offices to sort medical images and scans, as well as researchers and pharmaceutical companies.

The Merge technology platform gives Watson”the ability to “see” by bringing together Watson’s advanced image analytics and cognitive capabilities with data and images obtained from Merge”, IBM declared in the acquisition announcement.

So what: IBM announced that it is acquiring Merge for $7.13 in cash, which puts the value of the transaction at $1 billion dollars when adding in Merge’s debt load, and represents a nice premium for shareholders from yesterday’s closing price of $5.41.

It was just Wednesday that IBM was rumored to be interested in making a large data security company acquisition, but even that might be hard to really move the needle for Big Blue. Phytel deals with population health data; Explorys offers healthcare intelligence. The partnership with CVS would provide health practitioners and pharmacists access to IBM’s cloud-based AI analytics technology to improve healthcare services. IBM’s stock was little changed at $156.70.

IBM has always wanted to rejuvenate its health medical sector and they believe that this deal will be the one which solidifies IBM as one of the key companies in the growing sector. The goal, it said, is to shed new light on current and historical images, electronic health records and data from wearable devices.

“It’s a great affirmation of the innovation and creativity coming out of the Chicago market”, IBM Watson Vice President Stephen Gold said in an interview Thursday.

It will be fascinating to watch what success IBM sees in this area.

IBM is hoping to transfer its experience in data processing to the sensitive field of health care, part of an evolving strategy to pool and analyze data from other companies, such as Twitter Inc. and the Weather Channel.

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The addition of Merge and its medical imaging expertise will allow Watson to grow in a new direction, Kelly said.

IBM expects its acquisition of Merge Healthcare to give Watson the ability