Philips Bids $5.1B for Respironics
By TOBY STERLING
AMSTERDAM, Netherlands – Royal Philips Electronics NV said Friday it will bid around $5.1 billion for Respironics Inc., a maker of medical devices that assist or monitor breathing.
Philips offered $66 (94.99 euros) per share for Respironics, a 24 percent premium to the company’s closing price of $76.44 (53.11 euros) on Thursday, in an offer endorsed by the board of Murrysville, Pa.-based Respironics.
"Respironics is an excellent strategic fit and will significantly drive our growth in health care both in the hospital and in the home," said Philips Chief Executive Gerard Kleisterlee in a statement.
Respironics had about $1.2 billion in sales over the year ended Sept. 30, according to Philips, and was growing both sales and margins at close to 20 percent annually.
The bulk of Respironics’ sales come from selling devices that people with respiratory problems use in the home to diagnose or treat sleep breathing problems.
Millions of people suffer from sleep apnea, in which breathing temporarily stops during sleep. The condition has been linked to heart disease and diabetes.
Philips said the 3.6 billion-euro tender offer period was to begin Jan. 8, and the deal is expected to close some time in the first quarter of 2008, pending approval from shareholders and regulators.
The acquisition is one of a steady stream of takeovers of U.S. companies by Philips’ medical arm, which rivals General Electric Co. as the world’s largest medical equipment maker.
Most of the acquisitions involve monitoring equipment for hospitals and homes.
Last week, the company bid 430 million euro ($619 million) for Maryland-based Visicu, which makes patient monitoring equipment.
In October, it bought Raytel Cardiac Services, a Connecticut-based home heart-monitoring service, from Raytel Medical Corp. for $110 million (78 million euros).
In addition, in June, it announced the 1 billion euro ($1.4 billion) purchase of New York-based Intermagnetics General Corp., which makes magnets used in medical imaging devices.