Royal Philips has agreed to buy medical device maker Spectranetics Corporation for 1.9 billion euros ($2.16 billion) including debt, according to a report from Reuters on Wednesday. The Dutch healthcare company will pay Spectranetics shareholders $38.50 per share, a 27 percent premium to their closing price on June 27.
Philips described Spectranetics as a "leader in vascular intervention to treat coronary and peripheral artery disease, and in lead management for the minimally invasive removal of implanted pacemaker and implantable cardioverter defibrillator (ICD) leads."
The company uses a wide variety of complex techniques, including lasers and tiny drug-covered balloons to clean the insides of veins and arteries that have become clogged due to heart disease. Philips say the company will generate close to $300 million in sales this year and revenues will continue to grow at double-digit rates over the coming years.
"This transaction is expected to be revenue growth and profit accretive by 2018, given the projected revenue and productivity synergies," said Philips CEO Frans van Houten.
"Spectranetics' highly competitive product range, integrated with our portfolio of interventional imaging systems, devices, software and services will enable clinicians to decide, guide, treat and confirm the appropriate cardiac and peripheral vascular treatment to deliver enhanced care for patients with better outcomes, as well as significantly boost recurring revenue streams for Philips."
This is the latest in a string of acquisitions by Philips in the heart diseases therapy sector. This began with the purchase of vascular imaging company Volcano in early 2015 and has continued since. Earlier this month, Philips announced a deal to buy Eugene-based medical device maker Electrical Geodesics for roughly $36.7 million. In a separate announcement today, the company also announced a new 1.5 billion euro share buyback program that will begin in the third quarter and run for two years.
What does the market research have to say about the medical device market? According to the World Implantable Market report, “the primary driver for the global implantable medical device market is the continuous introduction of new products in the market. Moreover, this market is expected to grow with a healthy CAGR due to the rising incidence of chronic degenerative diseases, growing ageing population and rising healthcare expenditure.”
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