IBM to buy Merge Healthcare in $1B deal

IBM Corp. (NYSE: IBM) will buy medical image company Merge Healthcare Inc. (Nasdaq: MRGE) for $1 billion to combine with a newly formed health analytics division powered by its Watson supercomputer.

With the acquisition, its third major purchase since launching Watson Health in April, IBM gains access to 7,500 U.S. health care sites for data mining using Watson’s cloud-based computing system.

Equity of the offer is valued at $713.1 million, according to Reuters, based on 100 million outstanding shared in Merge as of June 30. Shareholders will get $7.13 per share at a premium of 31.8 percent based on Aug. 5’s closing prices.

Both stocks were slightly down at the market open Friday, with Merge trading at $7.08 per share compared to a 52-week high of $7.10 the day before. IBM traded at $155.08 per share, down from $156.35.

Read more from Reuters.