Philips (PHG) Signs Deal To Acquire Electrical Geodesics
Zacks Investment Research | Jun 22, 2017 09:06PM ET
Koninklijke Philips N.V. (NYSE:PHG) recently announced that it has inked an agreement to buy U.S.-based medical device company, Electrical Geodesics, Inc., for a total value of GBP29.0 million. This acquisition is likely to enhance the premium health technology provider’s imaging technologies and advanced informatics portfolio, used in neurological applications.
The Deal in Detail
Philips has made an offer of 105.4 pence in cash for each Electrical Geodesics share held. This represents about 36% premium of Electrical Geodesics’ closing value on Jun 21 in London. The transaction, scheduled to close in third-quarter 2017, is subject to customary closing conditions and stockholder approval.
Electrical Geodesics, which generated sales of $14.3 million in 2016, has a robust array of EEG platform technology. This offers the company a competitive edge over peers. These technologies have got clearance in the U.S., the EU and a number of other major international regulatory bodies. These are also being extensively deployed as research tools by leading healthcare service providers.
Philips asserts that the combined portfolios will help in the treatment of life-threatening neurological disorders such as stroke, epilepsy and Parkinson’s disease. The company believes that this strategic buyout will help it develop an integrated neurology solution, comprising diagnostic imaging and clinical informatics. This will assist medical personnel in developing a comprehensive map of the brain, assess its anatomy and measure electrical activity seamlessly.
In a recent survey by Markets and Markets, it has been reported that the global diagnostic imaging market is expected to reach $36.43 billion by 2021, at a CAGR of 6.6%. Factors, including grants from government bodies, higher investments by public-private organizations and growing number of diagnostic imaging centers, are anticipated to fuel the market's growth.
Acquisitions to Accelerate Growth
Over the past couple of quarters, Philips fortified its presence in the healthcare domain. To that end, the company has often turned to bolt-on acquisitions in order to stoke inorganic growth. Shares of the company have returned 20.3% in the last six months, outperforming the Zacks categorized Zacks Investment Research
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