ROCHESTER, N.Y., Nov. 18 -- Eastman Kodak Co. announced it will acquire Algotec Systems Ltd., a private developer of advanced picture archiving and communications systems (PACS), for $42.5 million in cash. PACS enable radiology departments to digitally manage and store medical images and information. Algotec, with 70 employees worldwide, is based in Raanana, Israel. It will become a wholly owned subsidiary within Kodak's Health Imaging Group and will develop medical PACS products and related 3-D imaging technologies for Health Imaging's Healthcare Information Systems (HCIS) business. The acquisition is expected to be completed by the end of the year. "This move will bolster our current PACS development efforts and will give Kodak greater leverage in a market growing at 15 to 20 percent annually," said Dan Kerpelman, president of Kodak's Health Imaging Group and a senior vice president of the company. "We will own Algotec's intellectual property, including its unique source code -- ideal for developing products in the rapidly growing category of web-enabled PACS." He said sales and technical specialists that serve multiple product groups in Health Imaging will soon begin supporting Kodak's PACS operation exclusively. "We also plan to double the size of this team by year-end, putting a total of some 40 specialists into the market to serve customers," Kerpleman said. Algotec and Kodak signed an agreement last May under which Algotec began providing supplemental software for the development of Kodak's PACS products. The Kodak Directview PACS System 5, which is now on the market, is the result of that collaboration. For more information, visit: www.kodak.com