Philips appears to have completed its Christmas shopping with a planned $5.1 billion purchase of home medical equipment supplier Respironics. The acquisition - the fourth in recent weeks for the Dutch IT vendor - would be Philips' largest acquisition ever, according to published reports.
Royal Philips Electronics, based in Amsterdam, announced earlier this week it would acquire healthcare IT firm Visicu for $430 million. In early December, Philips said it would buy lighting manufacturer Genlyte Group and hospital alert system supplier Emergin.
"We are taking a very important step that will establish Philips as a leader in healthcare beyond the hospital and will create an almost 8 billion euro healthcare sector for Philips with global leadership positions in cardiac care, acute care, and now home healthcare," Gerard Kleisterlee, chief executive of Philips told reporters in a conference call.
Learn on-demand, earn credit, find products and solutions. Get Started >>
Respironics, a publicly-traded company based in Pennsylvania and France, provides a range of healthcare IT solutions including a smart card data management system, ventilator support systems and vital monitoring devices for sleep and respiratory treatment.
"A core part of Philips' healthcare strategy is to achieve a leading position in the high growth sector of home healthcare," said Steve Rusckowski, CEO of Philips Healthcare. "This acquisition, with its significant strategic and financial benefits to Philips Healthcare, is another important step in carrying out this strategy." The purchase will put Respironics at the center of Philips Healthcare's Home Healthcare Solutions division, which launches Jan. 1, 2008, the company said in a release.
The purchase of Respironics is valued at nearly 22.5 times the company's expected 2008 earnings before interest, tax and amortization.
Philips, which is undergoing a financial overhaul, also announced this week it would buy back an estimated 5 billion euros of its shares. The Respironics purchase is expected to close in the first quarter of 2008.