July 11, 2009
VCA Antech expands its foray into medical technology by buying Eklin
By: Edie Lau
For The VIN News Service
Firming its position as an industry leader in medical technology by entering the digital radiology business was the driving reason that VCA Antech Inc. bought Eklin Medical Systems, Inc., according to VCA Chief Financial Officer Tomas Fuller.
Begun in Los Angeles 22 years ago as a company with a single animal hospital, VCA is today a corporate giant in the industry, owning more than 475 veterinary hospitals that employ more than 2,000 veterinarians, as well as a diagnostic laboratory division, Antech, used by more than 16,000 clients, according to the company.
On July 1, VCA Antech announced that it had completed a merger with Eklin. Eklin’s operations are now combined with those of Sound Technologies, which VCA bought in October 2004. The melded unit, dubbed Sound-Eklin, makes VCA the largest supplier of diagnostic imaging equipment and other medical technology products in the veterinary market, by the company’s reckoning.
Fuller said Sound had been bringing in $50 million in annual sales and Eklin about $35 million. Together this year, allowing for a dip due to the recession, Fuller said, he expects the combined unit to do between $75 million and $80 million in sales, amounting to about 5 percent of VCA’s consolidated revenues.
In acquiring Eklin, VCA also gained ownership of its VIA practice management software. The company has been working for years on developing its own such program, known as WoofWare.
“WoofWare was never intended for external delivery,” Fuller said. “We’d use it in our company only.”
He said VCA’s veterinary hospitals have been running on an old-fashioned proprietary text-based system, lacking the graphical interface most computer users have come to expect. The company has wanted for several years to come up with its own in-house program.
Whether VIA will be that program is unclear. “We’ll look at different alternatives for using one or both,” Fuller said.
The prospect of a corporate behemoth such as VCA Antech getting into the practice-management software business has caught the attention of those already in the field.
“We of course have discussed it,” said Ron Detjen, president and CEO of ImproMed Inc., a leading practice-management software company. “We’ve known that was coming. ... The rumor’s been out for about a month.”
At the moment, practice-management software is offered by a wide range of companies, with about 40 major players in the United States alone, by Detjen’s count.
AVIMark is the acknowledged industry leader. AVIMark Marketing Director Dan Holland declined to comment on VCA’s acquisition of Eklin and what it might portend for his field. “We aren’t familiar with the details or VCA’s intentions,” Holland said in a response by e-mail.
For his part, Detjen said ImproMed will continue to rely on its strengths as an independent, software-only company.
“We can be more flexible,” Detjen said. “My large competitors that are owned by these billion-dollar corporations, if they spit, they could drown me. The problem is, when they decide to spit, I’ve already moved.”
Fuller said that while his company’s future in practice-management software is undecided, one thing VCA is committed to is continuing to support users of VIA. “We will keep VIA going to make sure it’s a good system, and to upgrade and so forth,” he said. “We’re in the process of evaluating if we want to broaden it.”
VCA declined to divulge the number of VIA clients. The software is not among the leading brands in use.
As for the merger of Eklin with Sound and VCA at large, Fuller said it’s likely some of Eklin’s roughly 100 employees will lose their jobs, but there will not be “wholesale layoffs.”
Jim Drury, the president of Eklin, is remaining with the company, while Eklin Chairman and CEO Gary Cantu is retiring “to spend time with family, continue angel investments and work on outside board activities,” according to a press release.
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