Philips is to buy US medical device maker Volcano Corp for $1.2 billion including debt, to expand in catheter-based imaging of the heart and blood vessels as part of a wider refocus on more profitable markets.
The move is Philips’ largest healthcare acquisition in seven years and it says the deal will lead to synergies in research and development and sales. It comes three months after the Dutch company announced it was going to divide its lighting and healthcare businesses.
Volcano makes imaging catheters. Healthcare professionals using the catheters are guided by maps created on Philips' X-ray machines.
Chief executive officer, Frans van Houten, told Bloomberg that rival interest from competitors and a drop in Volcano’s share price spurred Philips to make its move.
“We had been on the look-out for this company,” he is reported to have said. “In the summer there was heightened interest by competitors so we decided to engage.
Van Houten said owning Volcano would enable Philips to reinforce its relationship with customers.
"The agreement to acquire Volcano significantly advances our strategy to become the leading systems integrator in image-guided therapies," he said.
"Volcano's impressive and unique product portfolio is highly complementary to our strong offering in live image-guidance solutions, creating an opportunity to accelerate the revenue growth for our image-guided therapy business to a high single-digit rate by 2017. Our combined sales forces will be able to capture immediate cross selling opportunities, while our joint R&D teams will be able to develop new solutions to address significant unmet needs in the minimally invasive treatment of cardiovascular diseases."
Upon completion of the transaction, the Volcano business and its 1,800 employees will be part of a dedicated, new image-guided therapy business group within Philips, which will be led by Philips executive Bert van Meurs, an experienced leader in the health care industry with a proven track record in the image-guided therapy market.