Sysmex takes over Delphic

Auckland laboratory management software maker Delphic Medical Systems is now part of a billion-dollar medical equipment empire after Tokyo-listed Sysmex took a controlling stake.

Delphic chief executive Roger Seaton said Sysmex had bought a 49 per cent stake held by the previous cornerstone shareholders, interests associated with Diagnostic Labs.

The other shareholders, who are all actively involved in the business, then diluted their holding slightly to give the Japanese 51 per cent. The price paid for the 15-year-old company was not disclosed.

"The big advantage for Delphic is we are partnering with a billion-dollar company with distribution channels worldwide," Mr Seaton said.

"This opens doors and creates new opportunities to develop new products. Even before this deal we were expecting to double staff in two years, and that now looks conservative." said.nte

Delphic has 46 staff and Mr Seaton said it would be looking for software developers and people with laboratory experience.

Sysmex would inject development capital into the business on a project by project basis. Development had already started on a new haematology work area system.

The Delphic-Sysmex relationship was formed through Sysmex's Belgian subsidiary, which Delphic business development manager Mark Cross identified two years ago as a potential partner to sell Delphic AP, the company's application for managing anatomical pathology laboratories.

Sysmex president and chief executive Hisashi Ietsugu said it became clear that Delphic had more to offer than a single product.

"We were looking for research and development capacity in Asia-Pacific, and saw an opportunity to come together," Mr Ietsugu said.

Sysmex makes diagnostic analysers, instruments and information systems for testing blood and urine.

It had also invested heavily in software firms, after deciding that the lines between analysers and lab IT systems were blurring.

Mr Ietsugu said the market for diagnostic equipment was dominated by pharmaceutical firms, which did not give information technology enough prominence.

Last year, Sysmex made a $US10.9 million ($25.28 million) profit on turnover of $US313 million.

Since then it had bought International Reagent, a company which makes the chemicals used in its lab equipment, a deal which pushed combined turnover to more then $NZ1 billion.

Mr Ietsugu said that with the Delphic deal, Sysmex was in a good position to offer a total solution, including hardware, software and consumables. He predicted earnings would hit $1.4 billion in two years.

The Japanese company had not sought 100 per cent of Delphic because "an IT company depends on its people, so we want to keep that intellectual capacity here".

Mr Seaton said that before teaming up with Sysmex, Delphic had sold systems in Singapore, Australia, the United States and Holland. He said it was cheaper and easier to develop software in New Zealand.

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