AVP acquisition provides path for E-Systems medical entrance

When the U.S. Army and Air Force asked for bids on their giantmedical diagnostic imaging support (MDIS) program, Advanced VideoProducts was the only company that made it to the final competitionagainst the heavyweight partnership of Siemens and defense contractorLoral Aerospace. AVP lost the contract last year but ended upwith a highly developed picture archiving and communications systemsline designed to meet MDIS specs (SCAN 10/9/91).

Now AVP has found its own defense contractor with the deeppockets and electronics/archiving technology necessary for PACSlongevity. More accurately, Dallas-based E-Systems found an opportunityto diversify into the supply of medical equipment through itsacquisition of AVP last month.

AVP will maintain its name, executives and Massachusetts base,functioning as the only organization within the $2 billion firm'snewly created E-Systems Medical Electronics subsidiary. ThomasJ. Goliash, AVP founder and CEO, will continue as president andgeneral manager. Goliash had owned over 75% of privately heldAVP.

"Budgets within the military are not growing at the ratethey used to, so they (E-Systems) are looking at areas for expandingtheir business," Goliash told SCAN. "AVP is a healthyand profitable company, and now we will have a lot of force behindus."

AVP can use the resources and market credibility E-Systemsbrings to the table when competing with the high-powered PACSpartnership of Kodak and Vortech Data, he said.

The PACS business has been picking up over the last year, andthere has been more hospital interest in higher end equipment,Goliash said.

"There are a lot more contracts on the street in largeracquisitions, and more people are going after ICU/CCU (PACS).I have even seen teleradiology upscaling a bit," he said.

E-Systems, known for its very high capacity archives used ingeological surveying, will help AVP add high-end technology toits line. The firm will also explore business relationships withother high-technology companies, such as IBM, he said.

"They (E-Systems) have expertise in image processing,compression and networking technology. That is going to give usan inside track in technology. This is something a $10 millioncompany couldn't afford," Goliash said.

Better product price/performance and education in the medicalmarket have helped to mature the PACS market, he said.

"PACS started in about 1980, but stayed very low, onlyrising in small increments. Now we are starting to see an upturn,"Goliash said. "We all thought it (development of the PACSmarket) would happen faster. Now it is coming. Unfortunately,a lot of companies suffered along the way."

AVP will be moving to a larger facility close to its currentLittleton, MA, headquarters, Goliash said.