(Bloomberg) -- International Business Machines Corp. agreed to buy Merge Healthcare Inc. for $1 billion, to incorporate the medical company’s imaging management platform with its Watson data analytics tool.

Merge’s shareholders will receive $7.13 a share, a 32 percent premium to Wednesday’s closing price. The all-cash deal, subject to regulatory review and approval from Merge’s investors, is expected to close later this year, the companies said Thursday in a statement.

IBM is bolstering its health-care services business, centered around a new business unit called Watson Health Cloud. Finding new sources of revenue has become increasingly important as demand for older services and technology has waned, dragging down sales for 13 straight quarters.

Merge’s shares climbed 31 percent to $7.08, shy of the deal price, at 9:55 a.m. in New York. IBMshares was little changed at $156.76.

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