Industry Trend Analysis - Philips Targets Inorganic Growth In Image-Guided Therapy Market - 10 JULY 2017

BMI View: Philips ' acquisition of Spectranetics will add breadth to its I mage -Guided T herapy business, strengthening its position in a high growth market. Relative to other ac quisitions undertaken , the deal is an expensive one. For Philips, this is warranted given the potential for sustained revenue growth resulting from new pr oduct introductions across a highly synergistic therapy device portfolio.

Royal Philips is to acquire Colorado-based Spectranetics, a company specialising in vascular intervention and lead management. Philips will pay Spectranetics' shareholders USD38.50 in cash per share, which represents a 27% premium to the company's closing price on June 27 2017. The implied enterprise value is approximately EUR1.9bn (USD2.2bn), inclusive of Spectranetics' cash and debt. The transaction is expected to close in Q317 and following the completion of the deal, Spectranetics and its approximately 900 employees will become part of Philips' Image-Guided Therapy business group.

Spectranetics Exhibiting High Growth Rates

Strong Top Line Growth
Spectranetics Total Revenue And Operating Income (USDmn), FY12-FY17
Source: Bloomberg, BMI

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