Philips acquires Respironics for $5.1bn
8 January 2008
Respironics, a US maker of sleep disorder devices, has
agreed to a takeover by Royal Philips Electronics (Philips) for
approximately US$ 5.1 billion. The offer price represents a premium of
approximately 31% over Respironics' recent closing share price. The
transaction is expected to be completed in the first quarter of 2008. The
deal is the third healthcare acquisition by Philips in December 2007,
following the takeovers of US clinical systems suppliers Visicu and Emergin.
Respironics is a global leader in the treatment of obstructive sleep apnea (OSA),
a sleep disorder characterized by the repeated cessation of breathing during
sleep. It is estimated that in the United States alone there are 18-20
million sufferers of moderate or severe OSA of which only 15-20% have been
diagnosed. Research in recent years has shown a link between OSA, heart
disease, stroke and diabetes.
The company also has a leading position in noninvasive ventilation and
has recently introduced new home oxygen technologies to serve the needs of
respiratory impaired patients in the home. The remainder of the company's
business is focused on the hospital channel and includes noninvasive and
invasive ventilation, respiratory monitoring, neonatal products and
respiratory drug delivery technologies for the treatment of respiratory
Upon closing, Respironics will become the headquarters for
Philips Home Healthcare Solutions group within Philips Healthcare, and
Respironics' senior operating leadership are expected to remain with the
organization and will continue to lead and manage the business.
Philips has made a number of recent acquisitions in the area of home
healthcare, including Lifeline Systems, Health Watch and Raytel Cardiac
Services. Today, Philips Home Healthcare Solutions supports almost one
million at-risk seniors, either in their own homes or in senior living
facilities throughout the US and Canada.
"A core part of Philips'
healthcare strategy is to achieve a leading position in the high growth
sector of home healthcare," Steve Rusckowski, Chief Executive Officer of
Philips Healthcare and member of the Board of Management of Philips
Electronics, said. "This acquisition, with its significant strategic and
financial benefits to Philips Healthcare, is another important step in
carrying out this strategy." Upon completion of this acquisition,
Respironics will become the centerpiece of Home Healthcare Solutions, which
will form part of Philips Healthcare as of January 1, 2008.