Philips expands into US home cardiac
monitoring market with acquisition of Raytel Cardiac Services
4 October 2007
Royal Philips Electronics (NYSE:PHG, AEX:PHI) has announced that it is to acquire US-based Raytel
Cardiac Services (a division of Raytel
Medical Corporation) and other ancillary operations from SHL Telemedicine
Ltd, for approximately US$110 million in cash.
Raytel Cardiac Services is a leading US provider of home cardiac
monitoring services that doctors prescribe to heart patients. Cardiac technicians
based at monitoring centres analyze
patient data and provide real-time patient information to prescribing
physicians.
Acquiring Raytel Cardiac Services represents a further step in Philips’
healthcare strategy of improving patient outcomes in specific care cycles,
such as cardiology. It complements
recent acquisitions of Lifeline and Health Watch. Philips has an 18%
shareholding in SHL.
The acquisition is subject to regulatory approval and is expected to
close in the fourth quarter of 2007, upon which Raytel will become part of
Philips’ Home Healthcare Solutions business group. Raytel will
also be rebranded under the Philips name.
“Heart disease is the number one killer in the west. So
Philips has invested heavily over the years to become the top supplier to
hospitals of medical equipment for managing heart disease. Patients are
living longer and healthcare costs are rising, so we’re looking for
innovative and effective ways to support both patients and the healthcare
system. Raytel can help us extend the cardiac care cycle into the home,
which is where patients prefer to stay, and where we see opportunities for
addressing healthcare costs as well as quality of life issues,” said Ron
Feinstein, CEO of Philips’ Home Healthcare Solutions business group.
Erez Alroy, Co-CEO of Tel Aviv-based SHL, commented: “We are very excited
about the agreement with Philips. This is a major achievement for SHL,
strengthening our relations with our strong strategic partner with the
capacity and capability to significantly increase penetration of SHL
products in the North American market. In addition, the transaction will
provide SHL with significant cash resources to increase the pace of its
expansion in the German market as well as development of new markets and
products"
The
activities Philips is acquiring are expected to have 2007 sales of
approximately US$55 million. Philips aims to grow Raytel Cardiac Services by capitalizing on its existing relationships with
15,000 referring physicians and cardiologists who serve over 200,000
patients annually.
Philips aims to leverage these relationships for Philips Lifeline’s
products and services as well as for Philips’ in-house line of remote
patient monitoring products and services. New products and services based on
Philips’ and SHL’s products and solutions, such as congestive heart failure
(CHF) monitoring in the home are also expected to fuel growth. Philips is
already the leading provider of personal response services and emergency
call systems in the United States and Canada through Lifeline, which has 750,000 subscribers.
These often suffer from a variety of
chronic illnesses, including CHF. Philips expects they too would benefit
from the cardiac monitoring service supported by trained cardiac technicians
that Raytel offers.
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