International Business Machines Corp said it would buy Merge Healthcare Inc, which provides medical images and clinical systems, in a $1 billion deal and combine it with its Watson Health analytics unit.
Merge Healthcare shareholders will get $7.13 per share at a premium of 31.8 percent to Wednesday`s close, the companies said.
Merge Healthcare shares were up 29.5 percent at $7 in early trading. IBM shares were little changed at $156.78.
The equity portion of the offer is valued at $713.1 million, according to Reuters calculations based on 100 million Merge Healthcare shares outstanding as of June 30.
IBM plans to combine data and images from Merge Healthcare`s medical imaging management platform with Watson computing platform`s image analytics.
Cloud-based Watson computing system analyzes high volumes of data, understands complex questions posed in natural language and proposes evidence-based answers.
The deal is IBM`s third major health-related buy since launching its Watson Health unit in April.