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Natus Medical to Acquire NeuroCom International

September 3, 2008

Natus Medical Incorporated (Nasdaq:BABY) today announced that it has agreed to acquire privately held NeuroCom International, Inc. NeuroCom, based in Clackamas, Oregon, develops and markets computerized systems for the assessment and rehabilitation of balance and mobility disorders. The acquisition adds to Natus’ growth opportunities by broadening its product offerings in the Company’s neurology business.

Natus agreed to acquire NeuroCom for a cash price of $18 million. NeuroCom reported revenue of $11.3 million in the twelve months ended June 30, 2008, and is expected to have cash of at least $3.4 million as of the closing. The Company expects to complete the acquisition in early October 2008.

Natus believes the acquisition will be immediately accretive to earnings, excluding associated one-time charges.

“This acquisition expands our neurology footprint into the growing balance and mobility assessment market. We are very excited about the growth opportunities in this developing field and we believe NeuroCom products will become the standard of care in this emerging field,” said Jim Hawkins, President and Chief Executive Officer of Natus. “We believe we can leverage their broad patent portfolio and market leading position through our worldwide sales and marketing channels.”

“NeuroCom has a history of strong product innovation, being the first company to develop and sell a turn-key system into the balance and mobility market, while at the same time generating consistent profitability. We believe this acquisition affirms our position as the market leader in neurology and brings Natus one-step closer to achieving our stated goal of growing revenue to a $250 million annual run-rate by the end of 2008,” Hawkins added.

Dr. Lewis Nashner, President and Chief Executive Officer of NeuroCom said, “We are pleased to become a part of the growing Natus team and believe the expanded opportunities provided through this acquisition will accelerate sales of our technologies into the growing global marketplace. We are also pleased that Natus plans to retain our operations as well as our established brands and products.”

2008 Guidance

Natus intends to update its revenue and earnings guidance for the fourth quarter and full year 2008 when it releases financial results for its third quarter ending September 30, 2008.

Conference Call

Natus has scheduled an investment-community conference call later today to discuss this announcement beginning at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). Individuals interested in listening to the conference call may do so by dialing (866) 314-9013 for domestic callers, or (617) 213-8053 for international callers, and entering reservation code 17571348. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (888) 286-8010 for domestic callers, or (617) 801-6888 for international callers, and entering reservation code 69338665.

The conference call also will be available real-time via the Internet at http://investor.natus.com, and a recording of the call will be available on the Company’s Web site for 90 days following the completion of the call.

About NeuroCom International, Inc.

Founded in 1984, NeuroCom International, Inc. is a world leader in the development of computerized tools for the assessment and rehabilitation of patients with balance and mobility disorders. This leadership, maintained through a commitment to products with strong scientific/clinical justification, extends to the best product support in the industry, and continuous educational support related to clinical applications and business opportunities.

Following the disablement model outlined by the World Health Organization, NeuroCom assessment protocols provide clinicians with specific diagnostic information related to underlying impairments and the resultant functional limitations, complementing traditional site-of-lesion diagnostic information.

NeuroCom initially developed the EquiTest Computerized Dynamic Posturography, with NASA and NIH support. Today, NeuroCom’s mission is to advance healthcare in the areas of chronic balance, dizziness, and vestibular disorders, and other balance dysfunction and mobility problems related to neurological conditions, diseases, aging, and injuries.

These systems are used around the globe in a broad spectrum of medical disciplines including otolaryngology, neurology, physiatry, orthopedics, sports medicine, geriatrics and physical rehabilitation, and are used in the management strategies of a wide range of acute and chronic disorders. There are currently more than one thousand medical and academic institutions utilizing NeuroCom technology in the United States and abroad.

Additional information about NeuroCom can be found at www.resourcesonbalance.com.

About Natus Medical Incorporated

Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and newborn care. Product offerings include computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology, as well as newborn care products such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, and software systems for managing and tracking disorders and diseases for public health laboratories.

Additional information about Natus Medical can be found at www.natus.com.

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, particularly statements regarding the expectations, beliefs, plans, intentions and strategies of Natus. These forward-looking statements include, but are not limited to, statements regarding future revenue and earnings growth, and anticipated benefits of the acquisition. These statements relate to future events or Natus’ future financial performance or results, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are only predictions and the actual events or results may differ materially. Natus cannot provide any assurance that its future results or the results implied by the forward-looking statements will meet expectations. Our future results could differ materially due to a number of factors, including the effects of competition, the demand for our products and services, our ability to expand our sales in international markets, our ability to maintain current sales levels in a mature domestic market, our ability to control costs, and risks associated with bringing new products to market and integrating acquired businesses. Natus disclaims any obligation to update information contained in any forward-looking statement.

More information about potential risk factors that could affect the business and financial results of Natus is included in Natus’ annual report on Form 10-K for the year ended December 31, 2007, and its quarterly reports on Form 10-Q, and in other reports filed from time to time by Natus with the U.S. Securities and Exchange Commission.




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