Dutch healthcare technology company Philips plans to buy US company BioTelemetry for cardiac diagnostic and monitoring devices in a deal valued at $2.8 billion, which will boost Philips’ offering of telehealth products, the company said that they would buy one share for $72 in cash, in an offer by the US company’s board of directors, at a value 16.5% higher than its closing share price on Thursday.
Philips shares rose 2% in market opening trading, making it one of the biggest gainers in the Amsterdam AEX Index. BioTelemtry has about 1,900 employees and focuses primarily on remote diagnosis and monitoring of heart disorders. This area represents 85% of the company’s sales, which reached $439 million last year, and will become part of the Philips Connected Care business, which Provides a range of platforms and devices that allow monitoring of patients while they are in their homes.
The coronavirus crisis this year has led to a surge in demand for remote patient monitoring tools, and previously scattered Philips has become fully focused on healthcare after shutting down its lighting and electrical products business in previous years.
The company expects that BioTelemetry will achieve double-digit growth and improve its adjusted revenue before interest, tax, and amortization (the so-called EBITA) margin to more than 20% by 2025, and the transaction is expected to close in the first quarter of 2021, as the transaction will boost Philips sales and profit margin growth in the coming year.