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Cardiology systems

Philips to acquire cardio systems developer Witt Biomed

MELBOURNE, Fla. – Royal Philips Electronics and Witt Biomedical Corporation announced that Philips will acquire Witt Biomedical Corporation, the largest independent supplier of hemodynamic monitoring and clinical reporting systems used in cardiology catheterization laboratories.

Subject to regulatory approval, Philips will acquire Witt Biomedical for approximately US$165 million. The transaction is expected to close in the second quarter of 2006.

In hospital Cath Labs, heart patients undergo a catheterization procedure, in which a small tube or catheter is inserted in an artery in the arm or leg to reach the heart for diagnosis and treatment. With the growing digitization of hospitals, cardiologists are increasingly demanding that Cath Labs be fully integrated into a hospital’s IT infrastructure.

Hemodynamic monitors measure and monitor a patient’s ECG (electrocardiogram), blood pressure and other vital signs associated with a Cath Lab procedure. Clinical reporting systems record and document the entire Cath Lab procedure.

Through this acquisition, both companies expect to benefit from being able to offer customers an integrated suite of best-in-class technologies for the Cath Lab department, leading to increased activity in cardiovascular x-ray, cardiology picture archiving and communication systems (PACS), and in hemodynamic monitoring and reporting systems.

Based on company estimates, Philips in 2005 held the number one global position in cardiovascular x-ray and in cardiology PACS. In hemodynamic monitoring and clinical reporting systems, Witt Biomedical was the largest independent supplier in the United States in 2005, and was the number 2 supplier in the global market.

According to Witt Biomedical, the company’s unaudited results for 2005 were sales of approximately US$49 million –- representing a growth in sales of 18% over 2004, and an operating margin of 30%.

Philips expects the acquisition of Witt Biomedical to be margin accretive from 2008 onwards, with initial margin dilution due to purchase accounting treatment. Upon completion of the acquisition, Witt Biomedical will be integrated into the Cardiovascular X-ray business unit within Philips’ Medical Systems Division.

“In 2005, the vendor reviewer KLAS ranked Witt Biomedical number 1 in the Hemodynamics and Clinical Reporting market,” said Jouko Karvinen, CEO of Philips Medical Systems. “By merging Witt Biomedical with Philips’ successful number one position in the cardiovascular X-ray and cardiovascular PACS markets, we intend to obtain a leading position in the growing market for fully integrated Cath Labs,” Mr. Karvinen added.

In commenting on the acquisition, Terence Witt, founder and CEO of Witt Biomedical said: “In the healthcare industry, Philips is known for its high quality medical equipment and for putting customers first -– an approach we fully share. And with Philips’ global reach, there’s clearly an opportunity for Witt Biomedical to further build on our presence beyond our base in North America.” Mr. Witt added: “We believe this deal makes sense for our current and future customers, as we combine our respective strengths in cardiology.”

To find out more about Witt Biomedical and its activities, please visit:
ww
w.wittbiomedical.com.

To find out more about Philips Medical Systems, please visit;
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ww.medical.philips.com.

 

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