Philips expands homecare market presence with acquisition of Health
10 May 2007
Amsterdam, The Netherlands. Royal Philips Electronics
(NYSE: PHG, AEX: PHI) will acquire Health Watch Holdings, Inc. a US-based,
privately-held provider of personal emergency response services, for
approximately US$130 million in cash.
The acquisition increases Philips' presence in the consumer healthcare
market and will add 100,000 US-customers to Philips Lifeline’s existing base
of more than a half a million subscribers in North America. The deal will
also increase the number of healthcare organizations and healthcare referral
sources in the Philips Lifeline network. The transaction is expected to
close in the second quarter of 2007.
“The acquisition of Health Watch builds on our successful acquisition of
Lifeline Systems last year, and will allow us to leverage Lifeline’s
existing investments in monitoring and service infrastructure and its
roadmap of innovative products across a larger subscriber base,” said Ivo
Lurvink, CEO and Executive Vice President of Consumer Healthcare Solutions.
“Through this move we expect to further increase the value-creating
potential of Lifeline’s personal emergency response business,” Lurvink
added. Since being acquired by Philips in the first quarter of 2006,
Lifeline Systems’ sales grew in excess of 15%.
Philips Lifeline’s and Health Watch’s twenty-four hour a day services
give independently minded seniors the confidence to maintain an active life
at home, knowing if they suddenly need help, they can send an alert to a
monitoring center indicating they need assistance. Two-way communication
allows a professionally trained operator to establish the nature of the
problem so that appropriate action can then be taken.
Seniors and their
families are increasingly looking for home healthcare solutions that let
at-risk seniors manage their health and wellness. And an aging population
provides strong underlying market growth for the solutions offered by
Philips Lifeline and Health Watch.
Seniors represent around 15% of the population in the developed world,
and that number is expected to almost double in size over the next 25 years.
Personal emergency response services are already the largest category of
home healthcare solutions purchased out-of-pocket by older adults and their
caregivers. Still, penetration in the age group 65 years and older is just 2
to 3 percent, allowing for significant future growth.