Philips to buy medical device maker Volcano Corp for $1.2 bn
17 Dec 2014
Dutch diversified technology company Philips N V today struck a deal to buy US medical device maker Volcano Corp, for $1.2 billion including debt.
Philips will pay $18 per share, or a total equity purchase price of $1 billion, a premium of 57-per cent to Volcano's closing price on the Nasdaq on Tuesday.
Philips intends to finance the proposed acquisition through a combination of cash on hand and the debt.
The board of Volcano has unanimously approved the transaction and recommends the offer to its shareholders. The transaction is expected to close in the first quarter of 2015.
With 2013 sales of around $400 million, San Diego, California-based Volcano is a leader in catheter–based imaging and measurements for minimally invasive diagnostics and treatment of coronary artery disease and peripheral vascular disease.
Volcano is the only company in the industry with a leading position in both IVUS imaging and FFR measurements. The company also has the broadest product portfolio around these two technologies, a leading IP position and a nascent peripheral vascular therapeutics business.
Philips has in the recent past created an image-guided therapy business and today has a portfolio of interventional imaging equipment, navigation tools, and services, and a sizeable global customer base, including each of the top 50 US Heart Surgery and Cardiology hospitals.
One in every three interventional X-ray systems sold globally is a Philips system. These systems provide the visual maps that allow the clinician to guide thin, tube-shaped instruments called catheters through the body, to the area of interest and perform the minimally invasive treatment.
Philips said that merger will create new sources of recurring revenue streams and increase sales growth for Philips in the €4 billion image-guided therapy market.
''Volcano's impressive and unique product portfolio is highly complementary to our strong offering in live image-guidance solutions, creating an opportunity to accelerate the revenue growth for our image-guided therapy business to a high single-digit rate by 2017,'' said, Frans van Houten, CEO of Royal Philips.
