Dutch electronics giant Royal Philips NV yesterday announced it is paying 1.9 billion euros (US$2.16 billion) to buy a specialist US company manufacturing ground-breaking treatments for heart and vascular diseases.
The Amsterdam-based company said it would acquire Spectranetics, which has developed a range of lasers and balloons for treating blockages in cardio and arterial vessels, to broaden its health portfolio.
Philips also simultaneously launched a two-year share buyback scheme of up to 1.5 billion euros, which is to start in the third quarter and represent a total of about 46.1 million shares.
Spectranetics, which has 900 employees, is trialling a drug-coated balloon to treat calcified blood vessels from the inside and expects to get US Federal Drug Administration approval soon, Philips chief executive officer Frans van Houten said.
“The drug-coated balloon segment is one of the fastest growing segments in peripheral vessel procedures,” Van Houten told reporters.
The treatment had so far shown “fantastic performance,” he said, adding that Spectranetics is expected to see about US$300 million in revenue this year.
The Spectranetics portfolio is to be joined with Philips’ Volcano products to give the company “a nice line up of devices for both heart, coronary and peripheral vascular” services, he said.
In combination with its image-guided products which allow doctors “to see inside the body and use these tools, we have a very compelling market position,” Van Houten said.
Spectranetics on its Web site said that about 7 million people around the world have cardiac devices and another 700,000 are fitted per year.
The two companies have entered into “a definite merger agreement” and the 1.9 billion euro acquisition would be paid for through a mixture of cash and debt, Houten added.
Philips, founded in 1891, was once best known for the manufacture of light bulbs, electrical appliances and TV sets.
However, it pulled out of these activities in face of fierce competition from Asian firms to focus on health technology such as computer tomography, and diagnostic and molecular imaging.
Employing about 70,000 people, it also manufacturers such vital medical equipment as defibrillators and household appliances — from hi-tech toothbrushes to kitchen equipment.
It listed its Philips Lighting division in May last year, netting proceeds of 750 million euros and while it still holds a large stake in the lighting division it intends to sell it entirely in the future.
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