General Electric Co. said Thursday that its health care unit is buying IDX Systems Corp., a provider of software to track patient records and billing, in a deal the companies valued at $1.2 billion.
Under the agreement, IDX shareholders will receive $44 a share in cash, or a 25 percent premium over the stock’s Wednesday closing price. Shares of the South Burlington, Vt.-based company jumped 23.2 percent to $43.35 in premarket trading.
The $1.2 billion total is net of IDX cash and equivalents, the companies said.
GE said the acquisition will significantly expand its health care offerings and aid in its drive to accelerate the transition to electronic health records. IDX’s administrative, clinical and imaging products will complement GE’s Centricity-brand applications, the company said.
The companies expect the deal to close by early 2006, assuming approval by IDX shareholders and regulators. IDX holders owning about 20 percent of the company’s shares have agreed to vote in favor of the buyout and both companies’ boards have approved the deal.
In 2004, IDX posted sales of $520.7 million and profit of $31.7 million. The company has systems installed at more than 3,400 sites — a combination of doctor’s offices and hospital networks — and employs about 2,400 people.
GE’s health care business is based in England and accounts for about $15 billion of the conglomerate’s annual revenue. The unit employs more than 43,000 people and makes products and offer services ranging from life support systems to drug research.