Philips is converted to $ 18 per share on the Nasdaq-listed Volcano, a hefty premium over the closing price of Volcano on Tuesday of $ 11, 49. Philips hopes to complete the acquisition in the first quarter of 2015.
Volcano is the producer of X-ray scanners and other cardiovascular technology. Last year sales of approximately $ 400 million recorded there. Then a slight operating loss was achieved.
Smarter catheters
Philips hopes the acquisition to increase its share in the market for so-called “image guided therapy ‘, which cardiologists through catheters into blood vessels may look. The company estimates the total market for these products at € 4 billion.
Philips President Frans van Houten mentions the activities of Volcano strong in addition to the package of Philips in this market segment. Through the acquisition Volcano of the catheters can be integrated into the medical systems of Philips. Also, the catheters are increasingly being “smarter”, because they are used to measure, for example, the blood pressure and -doorstroming. “We help navigate the cardiologist in the body,” says Van Houten.
Upon completion of the transaction, the 1,800 employees will of Volcano become part of a new division that will be led by Bert van Meurs, from the branch of Philips Healthcare. By cost-cutting measures and synergy the takeover in 2017 will contribute to earnings per share, Van Houten expected. Philips aims for an operating profit (EBITA) of 20% of its imaging business in 2017.
Bank of America Merrill Lynch and Lazard have advised on the acquisition.
Payment in cash
Philips has its activities in this area strengthened in recent years through strategic investments in research and development, joint ventures and technology licensing
Philips will acquire a total of $ 1.2 billion in cash checkout. The group will meet the acquisition partly from its cash and partly by issuing loans.
The board of Volcano stands united behind the transaction and recommends its shareholders to accept the offer.
No bids battle
Van Houten stressed that it was a good time to make an offer on Volcano. The share of this year dropped from $ 28 to $ 11.49. “It’s a good opportunity to jump on here.”
The Philips CEO spoke of a hefty premium. “But we see this as a very attractive case.” He will not be tempted to any bidding battle, another candidate should also sign up for Volcano. Van Houten noted the full support for the Philips bid Volcano board. “This is our bid. Here it will continue to. “
Philips announced in September that it will focus on its role as a provider of health technology. The light division will be sold.
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