Philips' Acquisition Spree Continues With VitalHealth Buy
Zacks Investment Research | Dec 10, 2017 08:19PM ET
In a bid to strengthen foothold in the healthcare markets, Koninklijke Philips N.V. (NYSE:PHG) recently announced the acquisition of VitalHealth.
VitalHealth is a leading supplier of cloud-based population health management solutions for the delivery of personalized care outside the hospitals. VitalHealth’s strong portfolio of telehealth applications and care coordination platform would complement Philips Wellcentive’s solution that includes health informatics and patient engagement programs.
Together with the VitalHealth’s portfolio of solutions, the company’s Wellcentive solution will enable healthcare providers to better identify and deal with high-risk and high-cost patient populations. The buyout will strengthen the company’s population health management portfolio with advanced analytics, care coordination, patient engagement as well as outcome management solutions.
This apart, the company also recently acquired Forcare, a leading innovator in open-standards-based interoperability software solutions as it seeks to fortify clinical informatics portfolio.
Philips already enjoys a dominant position as a comprehensive clinical informatics solutions provider and believes this buyout will enable it to deliver more effective and seamlessly integrated informatics solutions. This will also facilitate the company to improve patient care, clinical workflow as well as optimize enterprise management. The terms of both the acquisitions were kept under wraps.
Existing Business Scenario
Though Philips has successfully morphed from a lighting company into a healthcare technology provider, the company’s near-term profitability is likely to be hurt by sluggish growth prospects of the healthcare market on a global scale.
In light of uncertainties like slowing government spending and events surrounding the Affordable Care Act (“ACA”) legislation, the company expects the United States to witness low-single digit growth in the healthcare industry. The Zacks Rank #4 (Sell) company has returned 7.7% in the last six months, underperforming the Zacks Investment Research
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