Philips to Acquire Spectranetics for €1.9 Billion to Accelerate Expansion in Image-Guided Therapy
On June 28, Philips announced that it would acquire Spectranetics Corp., a U.S. manufacturer of minimally invasive surgical medical devices, for €1.9 billion (approximately $2.16 billion), to expand its leading position in the global image-guided therapy market and accelerate the expansion of image-guided therapy devices for treating cardiac and peripheral vascular diseases. The transaction will be paid entirely in cash.
Under the agreement, Philips will acquire all issued and outstanding shares of Spectranetics at $38.50 per share, including Spectranetics’ cash and debt. This represents a 27% premium over Spectranetics’ closing price on June 27, 2017. The Board of Directors of Spectranetics has approved the transaction, which is expected to be completed in the third quarter of this year.
Philips holds a leading position in the €6 billion image-guided therapy market, with a portfolio that includes unique interventional imaging systems and devices, navigation software, and services. Its customers span the globe, and it maintains a network of clinically focused partners that is among the world’s most advanced.
One-third of the interventional X-ray systems sold in the global market are from Philips. These systems provide visualized images to help clinicians deliver catheters (slender, tube-like devices) within patients' bodies to target sites, thereby enabling minimally invasive procedures.
Spectranetics is the industry leader in consumables for minimally invasive cardiovascular procedures.
The acquisition of Spectranetics will further expand and strengthen Philips’ image-guided therapy business. Founded in 1984 and headquartered in Colorado, Spectranetics Corp. is a medical device company specializing in minimally invasive surgical procedures, primarily engaged in the research, development, manufacturing, and sales of disposable medical devices used in minimally invasive cardiovascular interventions. CurrentlyThe company's products are in use in more than 65 countries.
Spectranetics is an industry leader in vascular interventions for the treatment of coronary and peripheral artery diseases. Its main products also include devices for the minimally invasive implantation of cardiac pacemakers and implantable cardioverter-defibrillators (ICDs). The company’s product portfolio further comprises support catheters that facilitate crossing of peripheral and coronary occlusions, as well as retrograde access and wire extraction devices for the treatment of peripheral arterial obstructions, including chronic total occlusions.
Another product, the Stellarex drug-coated balloon, is a key driver of Spectranetics’ revenue growth. It received CE marking approval in Europe in December 2014 and is currently under FDA pre-market approval review for commercialization in the United States. This product is indicated for use in peripheral vascular interventions and has demonstrated excellent clinical performance to date.
Spectranetics Official Website Screenshot
Achieve revenue and profit growth before 2018
Philips CEO Frans van Houten stated, “We are accelerating our strategic expansion into therapeutic devices. Given the anticipated revenue and productivity synergies, this transaction is expected to drive revenue and profit growth by 2018. Spectranetics’ highly competitive product portfolio complements our interventional imaging systems, devices, software, and services, helping clinicians determine appropriate cardiac and peripheral vascular treatments and delivering better outcomes for patients.”
Upon completion of the transaction, Spectranetics and its more than 900 employees will become part of Philips’ Image-Guided Therapy business. Furthermore, the transaction will accelerate the geographic expansion and commercialization of Spectranetics’ products. As part of Philips, the Spectranetics business will immediately benefit from Philips’ platform, thereby achieving cost recovery and enhancing liquidity.
It is estimated that the revenue of Spectranetics and Philips’ Image-Guided Therapy business (Philips Volcano) will grow to approximately €1 billion by 2020.
Spectranetics is currently experiencing double-digit revenue growth, with 2017 sales projected to range between $293 million and $360 million.
Its current distributor in China is Jietong Aimeigao (Beijing) Pharmaceutical Technology Co., Ltd., which holds nine registration certificates.
Source: http://www.philips.com