Philips to acquire cardiology healthcare company Witt Biomedical corporation
Move to position Philips as leader in growing market for integrated Cath Lab solutions
Wednesday, March 08, 2006, Philips and Witt Biomedical Corporation today announced Philips will acquire Witt Biomedical Corporation, the largest independent supplier of hemodynamic monitoring and clinical reporting systems used in cardiology catheterization laboratories
(Cath Labs). Subject to receipt of regulatory approval, Philips will acquire Witt Biomedical for approximately USD 165 million. The transaction is expected to close in the second quarter of 2006.
In hospital Cath Labs, heart patients undergo a catheterization procedure, in which a small tube or catheter is inserted in an artery in the arm or leg to reach the heart for diagnosis and treatment. With the growing digitization of hospitals, cardiologists are increasingly demanding that Cath Labs be fully integrated into a hospital’s IT infrastructure. Hemodynamic monitors measure and monitor a patient’s ECG (electrocardiogram), blood pressure and other vital signs associated with a Cath Lab procedure. Clinical reporting systems record and document the entire Cath Lab procedure.
Through this acquisition, both companies expect to benefit from being able to offer customers an integrated suite of best-in-class technologies for the Cath Lab department, leading to increased sales in cardiovascular x-ray, cardiology picture archiving and communication systems (PACS), and in hemodynamic monitoring and reporting systems. Based on company estimates, Philips in 2005 held the number one global position in cardiovascular x-ray and in cardiology PACS. In hemodynamic monitoring and clinical reporting systems, Witt Biomedical was the largest independent supplier in the United States in 2005, and was the number 2 supplier in the global market.
According to Witt Biomedical, the company’s unaudited results for 2005 were sales of approximately USD 49 million – representing a growth in sales of 18% over 2004, and an operating margin of 30%. Philips expects the acquisition of Witt Biomedical to be margin accretive from 2008 onwards, with initial margin dilution due to purchase accounting treatment. Upon completion of the acquisition, Witt Biomedical will be integrated into the Cardiovascular X-ray business unit within Philips’ Medical Systems Division.
“Through this latest acquisition, Philips is again partnering with a best-in-class company with an outstanding customer approval rating. Witt Biomedical is not only an exceptional company with an established track record in developing innovative solutions for the Cath Lab – it’s also a leader in its field. In 2005, the vendor reviewer KLAS ranked Witt Biomedical number 1 in the Hemodynamics and Clinical Reporting market,” said Jouko Karvinen, CEO of Philips Medical Systems. “By merging Witt Biomedical with Philips’ successful number one position in the cardiovascular X-ray and cardiovascular PACS markets, we intend to obtain a leading position in the growing market for fully integrated Cath Labs,” Mr. Karvinen added.
In commenting on the acquisition, Terence Witt, founder and CEO of Witt Biomedical said: “In the healthcare industry, Philips is known for its high quality medical equipment and for putting customers first – an approach we fully share. And with Philips’ global reach, there’s clearly an opportunity for Witt Biomedical to further build on our presence beyond our base in North America.” Mr. Witt added: “We believe this deal makes sense for our current and future customers, as we combine our respective strengths in cardiology.”
About Royal Philips Electronics
Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world’s biggest electronics companies and Europe’s largest, with sales of EUR 30.4 billion in 2005. With activities in the three interlocking domains of healthcare, lifestyle and technology and 159,200 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions. News from Philips is located at www.philips.com/newscenter
About Witt Biomedical
Founded in 1990 in Melbourne, FL, Witt Biomedical Corporation designs and delivers innovative cardiovascular enterprise solutions that encompass physiomonitoring and information systems for the cath lab, as well as multimodality image and information management technologies. More than 950 facilities worldwide use Witt technology for millions of cardiovascular procedures annually. In 2005, Witt was named “Best in KLAS” for two KLAS market segments, Cardiology PACS and Cardiology Reporting & Documenting. In addition, the 2005 Top 20 Year-End Best in KLAS report named Witt Biomedical the Specialty Niche Category Leader for Cardiology Hemodynamics. All Witt products are seamlessly integrated and backed by knowledgeable customer support experts. For more information, call 800.669.1328 or visit www.wittbiomedical.com.
This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.
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