Local firm adds U.S. technology company

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This article was published 11/03/2015 (4147 days ago), so information in it may no longer be current.

THE Winnipeg company that makes the robotic pharmaceutical and IV dispensing technology favoured by hospitals around the world has acquired a complementary technology company about four times its size.

Intelligent Hospital Systems (IHS), makers of the RIVA (robotic intravenous automation) units has acquired AmerisourceBergen Technology Group (ABTG), based in Buffalo Grove, Ill.

It is a small division, part of the $100 billion per year U.S. pharmaceutical distribution company, AmerisourceBergen Corp., which is based in Pennsylvania.

Niels Erik Hansen, CEO of IHS, will be the CEO of the newly merged entity, now called Arxium.

Hansen said IHS has had plans for more than three years to try to develop an end-to-end solution for hospital-pharmacy management and has been in talks about partnership opportunities with ABTG for some time.

The new unit, with about 250 employees located just north of Chicago, generates close to $100 million in revenue. By comparison, IHS has about 65 employees in Winnipeg and another 15 in other locations.

In addition to a number of automated-pharmaceutical-dispensing technologies for solid medications, ABTG develops workflow and scheduling software that could directly integrate with the Winnipeg company’s robotic IV dispensing equipment.

Hansen said the merger of IHS with ABTG to form Arxium will leverage greater access to potential customers for the Winnipeg company’s unique RIVA robotic units.

“They have more than 1,000 customers, IHS does not have nearly that many,” Hansen said in an interview from the ABTG offices where he’d just spoken with staff. There are about 35 RIVA units in the U.S., four in Canada and a handful elsewhere around the world.

“The most important thing is that the combined company can offer a full end-to-end solution for the pharmacy,” he said. “That’s what our customers have been saying they want.”

Hansen was emphatic to note the integration of the two companies was going to happen as fast as possible.

He said it was important there not be an attitude of “us and them.” That’s why, he said, there was a decision to rebrand the larger company with a new name — Arxium.

The Winnipeg owner of the company, Ed Van Humbeck who acquired IHS last year, said this had been the plan for some time.

“We realized that it was going to take too long (to grow the company) with just the RIVA,” Van Humbeck said.

Details of the purchase arrangement were not disclosed but Van Humbeck said it was a cash deal with debt financing, but no new equity partners would be added.

The characteristic of this transaction — a smart, small Winnipeg company buying a complementary company four times its size — flips around the more typical scenario where larger companies buy out the smaller, local firm.

Hansen said even though the ABTG unit was doing close to $100 million in revenue, it was a very small part of the parent company’s business. (AmerisourceBergen Corp. had total sales of $88 billion in 2013.)

“It was a support group and never had a mission or vision of its own,” Hansen said. “In meeting with staff I would say they are excited.”

With its $1 million-plus price tag, there is a lengthy sales cycle for the RIVA, creating challenges for the operation of a stand-alone company with that being virtually its only product for sale.

When Van Humbeck, a longtime investor and former owner of Vansco Electronics, acquired 100 per cent of IHS, he said he would be investing even more in the Winnipeg company.

On Monday, he said, “This is exciting. We are really looking forward to making this into a very significant Manitoba-based company.”

martin.cash@freepress.mb.ca